Only 32.7% of Huddersfield Households are Eco-friendly

Improving the energy efficiency of Britain’s 27.2 million homes, which are responsible for more than a quarter of the country’s CO2 and other greenhouse gas emissions, is seen as key to tackling the issues of climate change, fuel poverty and our country’s energy security. This is particularly important as in June the Government announced they were going to make the country carbon neutral by 2050, meaning Britain’s homes need some enormous retro-fitting to meet these ambitious climate targets.

Researchers at Nottingham Trent University said it would cost on average £17,000 per property to retrofit an average UK home to make it carbon neutral with renewable energy and insulation (if done en masse and not piece meal). That would cost the Country £462.4bn (interesting when the NHS costs £154bn per year). Now of course 22.7m homes are privately owned so that would be the responsibility of the owners, but if we look at publicly owned council housing, that would cost the Government in excess of £76.5bn - HS2 is ‘only’ £56bn!

The benefits of making homes carbon neutral go further than saving the planet, as occupants would have much lower gas and electric bills (which total £31.824bn per year), warmer households and a much-lower strain on the NHS, which currently spends about £848m a year treating conditions that arise from cold housing. Also, local authorities would have to spend a lot less than the £5.2bn a year for ongoing property maintenance by the installation of extra insulation and renewable energy such as ground source heating, wind or solar panels.

To improve efficiency ratings, last year the Government banned landlords from renting property with an energy performance rating of F and G (the lowest ratings), yet I don’t think there is an appetite to force private homeowners to do this work (although you never know in the future??). Homeowners would be unenthusiastic to take on the bother and cost of such building works, yet the Government could offer incentives and grants, which along with the funds saved on their energy bills could make the plan more appealing?

So, what about eco credentials of the properties of Huddersfield homeowners and landlords?

Every home that has been built, rented out or put on to the market in Huddersfield since 2007 has had to have an Energy Performance Certificate (E.P.C), giving it a rating between A and G (rather like those stickers you see on fridges and washing machines). A is highest rating (i.e. most efficient and greener) and G is the worst energy performance rating. So, looking at Huddersfield first, then comparing us to the rest of the UK, this is the result...

So, 32.7% of Huddersfield homes are in that eco-friendly A to C energy performance banding ratings, which is proportionally 11.86% lower than the national average.

So, what next? Well the Government will endeavour to make the green revolution as painless as possible with technology developments like LED light bulbs, for example, saving greenhouse gases without people noticing. In the future we might have hydrogen central heating instead of mains gas, all have solar panels for electricity, all triple glazed windows and even ground sourced heating ... sounds pie-in-the-sky? Well who would have thought some of the most wanted cars would be electric and hybrid 10 years ago, built by the likes of Tesla?

There is no doubt that the energy efficiency of a property will rise in the coming years as the cost of fuel and people’s opinion on going green changes. You don’t need to spend £17,000 to find out what you can do to make your property greener. Look at your E.P.C and it will tell you what small changes you can make to improve your Huddersfield home’s energy efficiency rating and ultimately save yourself money.

If you want to find your E.P.C rating of your Huddersfield home, go to www.epcregsiter.com

4.8% of all Properties Sold in Huddersfield are New Builds

Of the 10,200 houses and apartments sold in Huddersfield (HD2) since 1995, 1,040 of those have been new homes, representing 4.8% of property sold. So, I wondered how that compared to both the regional and the national picture …and from that, the pertinent questions are: are we building too many new homes or are we not building enough?
Roll the clock back a few years and in 2013 the Government expressed its disappointment that, as a Country, builders weren’t building enough new homes to house our citizens. They promised to hasten new homes building to the fastest rate since the 1980’s when the Country was building on average 168,100 private households a year. The Housing Minister stated he wanted the private sector to build in excess of 180,000 households a year, a figure which seemed unachievable at the time. In 2013, private house building was in the depths of a post Credit Crunch dip, with just 96,550 private new homes being built that year. Yet, in the five years since then, private new-build completions have climbed steadily, rising by 59.5% to 154,100 new home completions in 2018..so on appearances alone, whilst the growth is impressive, the new homes builders haven’t met their targets….. or have they?
In addition to the 154,100 new homes completions in 2018, the private sector also provided an additional 29,700 new households gained from change of use between office, industrial and agricultural buildings to residential homes meaning, last year, the private sector created 183,800 new households. When we look at the public sector, there were 30,300 Housing Association new homes and 2,950 Council houses built last year, meaning after making a few other minor adjustments, the total number of new households/dwellings created in the UK in 2018 was 222,190.
Most of the growth can be credited to an improving economic framework, though continued help for first time buyers with the Help to Buy Scheme has enabled some younger buyers to bypass the issue of saving for a large deposit for a mortgage when buying a home, thus supporting confidence among new home builders to commit to large building schemes. Yet there is more to do. The Government wants the Country to return to the halcyon days of the 1960’s where, as a Country, we were building 300,000 additional homes a year  .. and they want that to happen by 2025, a 36% increase from current levels.
In 2019, the country will create 257,500 households, so we are on our way to meeting that target but maintaining this level of house building will be a test. Even the Governments’ Auditors (the Office of Budget Responsibility) is predicting net additional dwellings will plateau at about 240,000 in the first few years of the next decade.
So, how does Huddersfield sit within this framework?
The UK currently has 27.2m households, of which 2.45m (9%) of those have been built since 1995, whereas in Huddersfield, of the 12,800 households in HD2, 1,040 were built since 1995 (representing 8.1% of all households), meaning Huddersfield has a lower proportion of new homes building in the last couple of decades than the national figures.


I certainly feel there is an over reliance on the private sector to meet the Country’s housing needs. Local Authority’s need to step up to the plate and build more houses, and its true central government has released more cash for them to do just that, but probably only 20% to 25% of what is required. In the meantime, unless the Country starts to build 300,000 households a year, property prices will retain and improve their value in the medium to long term – which is good news for Huddersfield landlords and Huddersfield homeowners.

Huddersfield Homeowners Sell Their Home Nearly 5% Less Than the Regional Average

The average homeowner in the UK moves every 20.2 years…

That average in the 1970’s and 80’s was around every 10 to 11 years; in the 1990’s it increased to the mid-teens (in terms of years) and in the early part of the Millennium, it dropped again to the low teens. When we had the Credit Crunch years of 2008/09/10, that shot up to every 25.3 years and has been steadily decreasing ever since to the 2018 figure of 18.7 years.

The graph shows that as the economy improved after the Credit Crunch, British homeowners started to move home more and may have be taking advantage of higher demand and lower supply in the housing market to sell their homes and move on to the next property. Yet, most Huddersfield (and British) homeowners are more often than not buyers as well, so that cannot be the real cause. As mentioned already, people in the 70’s and 80’s moved a lot more than today.

So why is the long-term average length of time between moves since 2000 still much higher than it was in the preceding 30 years? For existing homeowners, some people have said their lack of an appetite to move home compared to the 1970’s and 1980’s might come down to their mortgages and the need for higher equity to put down on the next house. It is true the number of years you stay in your home determines how much you will pay back on the mortgage you took out when buying it. If you stay longer, you have the prospect to pay back a larger portion of the money you borrowed to buy the home. Interestingly, if you consider someone with a 25-year mortgage on the UK average variable rate of 3.4% for existing mortgage borrowers, borrowed say £200,000 at the start of the mortgage and made monthly payments on that mortgage, it would take 15 years and 1 month to build up over 50% (or £100k) in equity (and 17 years 2 months if interest rates were at their historic average in the 1980’s and 1990’s of 7%) … all assuming there was no decrease in value of the property.

Instead, I think the issue is a lot deeper than that. Firstly, I believe there has been a long-term change in attitude to moving home and this lack of people moving home (compared to the last 30 years of the 20^th Century) is part of a slowdown in the country in social mobility. Interestingly, a million fewer people moved in the noughties (2000 to 2010) than in the 1970’s, after other changes in population have been taken into consideration. You see back in the 1970’s and 80’s, it was expected that people kept moving up the ‘property ladder’ to bigger and better homes (i.e. keeping up the Jones’).

Secondly, there has been a change in attitude to homeownership per se … as 20 to 30 somethings (Generation Rent) have been weaning themselves off the ‘homeownership drug’ for the last 15 years that the baby boomers were addicted to in the 1970’s and 80’s ... meaning there are less buyers at the bottom of the housing ladder to fuel the fire. That is an important factor on the long-term decrease in home moving as buy to let landlords have been buying the smaller style starter homes to house Generation Rent … yet landlords don’t tend to move up the housing ladder after a few years like first time buyers - landlords just buy another property.

So, what is happening in Huddersfield with regard to people moving home?

I have mentioned a number of times in my articles about the Huddersfield property market that the number of people who move home (i.e. the number of property transactions) is a more important bellwether to the health of the local property market.

Therefore, I compared the number of people moving home in Huddersfield to the regional stats of home movers and the country as a whole. I also decided to look at a long-term point of view to judge the Huddersfield housing market, because as can be seen on the first graph, there is often short-term volatility. Looking at the stats...  

Since 1995, Huddersfield people have moved home 4.89% less often than the regional average

Looking at this second graph, 77.6% of the Huddersfield (HD5 to be precise) privately owned housing stock has been sold since 1995 – close to the national figure and interesting when compared to the regional figure of 81.5%. Why? Well I am sure this might be the topic of an up and coming article on the Huddersfield Property Market Blog.

Huddersfield and Kirklees Council House Waiting List Drops by 25.5% since 2011

In 1979, more than 4 in 10 British people lived in a council house, yet today that figure is only 1 in 12, whilst according to Shelter 65% of families on the Council House waiting lists had been on those lists for more than a year and 27% had been waiting for more than five years.

One solution to the housing crisis has always been for the local authority to build more homes, yet should the state provide people with secure and dependable places to live – or is that an out-dated point of view? To look at this objectively, let’s take a step back.

After WW2, both Tory and Labour governments were building council houses in massive numbers, yet it might surprise you to know that more Council houses were built per year under Tory Governments than Labour ones between the years 1945 and 1970.  
Everything changed in 1979, when Margaret Thatcher delivered the right for Council tenants to buy their Council House (called the Right To Buy Scheme). Interestingly, Right To Buy was a Labour Party idea from one of Labour Manifestoes of the late 1950’s (although they lost to the Tory’s). Mrs Thatcher’s idea was based on massive discounts and 100% mortgages for those buying … but this was the real issue that has come back to bite us all these years later! Half the proceeds of the property sales went back to Westminster and the other half went back to the local authority – but the Councils half could only be spent on reducing their debt – not to be spent on building more Council houses.. hence why we have a shortage of council houses.

In 2011, Central Government gave local authorities the power to limit people’s entitlement for social housing (aka Council Housing), hence removing those people that did not have an association or link to the locality.

Today, in Huddersfield and the whole of Kirklees, the Council House Waiting List has dropped by 25.5% since 2011, meaning

10,977 families are waiting for a Council House

in Kirklees

Interestingly though, if our local Council House Waiting List had dropped by the same amount as the national one, the waiting list figure would be 8,995 instead, because nationally Council House waiting lists are 38.6% lower than 2011.

So where are these Huddersfield families all living and what does this mean for Huddersfield homeowners and Huddersfield Landlords?

Quite simply, private landlords have taken up the slack and housed all those people that were on the waiting list. This is important as more and more tenants are stopping longer in the Private Rented Sector - the average length of time of a tenant stays in the same property is now 4 years. Renting is becoming a choice for many, as the years of this Millennium roll on. So much so, would it surprise you to know that renting a house can be more expensive than buying it as we have these ultra-low mortgage rates and 95% mortgages freely available?

Rents in the Rental Sector in Huddersfield will increase steadily during the next five to ten years. Even though the Council House Waiting List has decreased, the number of new council and housing association properties being built is at a 75-year low. The government campaign against buy to let landlords together with the increased taxation and the banning of tenant fees to agents will restrict supply of private rental property, which in turn using simple supply and demand economics, will mean private rents will rise – making buy to let investment a good choice of investment vehicle again (irrespective of the increased fees and taxation laid at the door of landlords). 

..and for home owners (and landlords) Huddersfield property values will remain strong and stable in the medium term, as the number of people moving to a new house (and selling their old property) will continue to remain limited, meaning that due to lack of choice and supply Huddersfield buyers will have to pay decent money for any property they wish to buy (especially ones in good locations and presented well).

Interesting times ahead for the Huddersfield Property Market!

Huddersfield Property Market Do We Have the Right Sort of Huddersfield Homes For the 21st Century?

Would it surprise you to know that in some parts of Huddersfield, predominantly prosperous areas with high proportions of mature residents, the housing crisis is not one of supply so much as dispersal of that supply? Theoretically, in Huddersfield there are more than enough bedrooms for everyone - it’s just they are disproportionately spread among the population, with some better-off and more mature households living in large Huddersfield homes with many spare bedrooms, and some younger Huddersfield families being over crowded.

Yet it is not the fault of these well-off mature residents that this is the current situation. Let’s be frank, Huddersfield doesn’t have enough housing full stop (otherwise we wouldn’t have the large Council House waiting list and all the younger generations renting instead of buying), but up until now it hasn't been clear that Huddersfield actually also has the wrong types of properties.

We're not building the smaller homes in Huddersfield that are needed for the starter homes and we aren’t building enough bungalows for the older generations, so they can be released from their larger Huddersfield homes, thus allowing those growing Huddersfield families to move up the ladder.  

Looking at the stats for Huddersfield, and HD1 in particular...

When I compared Huddersfield (HD1) with the regional stats of the HD postcode, the locality has proportionally 133% more apartments, yet 65.8% less detached homes. Looking nationally, Huddersfield (HD1) has proportionally 96.1% more terraced/town houses and proportionally 67.5% less apartments.

I am finding that there has been a shortage of smaller townhouses and smaller apartments being built in Huddersfield over the last 20 years, because most of the new builds in the last couple of decades seem to have been either large executive houses or the apartments that have been built were of the larger (and posher) variety, even though demand for households (as life styles have changed in the 21^st Century) have been more towards the lower to middle sized households.

The builders do want to build, but there's a deficiency of building land in Huddersfield, and if there's a shortage of building land, then of course new homes builders build whatever gives them the biggest profit. The properties that give them the largest profit are the biggest and most expensive properties and they certainly are not bungalows as they take up too much land. So who can blame them?

Yet would it surprise you to know that it’s not a lack of space (look at all the green you see when flying over the UK), it’s the planning system. Green belts must be observed, but only 1.2% (yes 1.2% - that isn’t a typo) is built on in this country as a whole with homes - we need the planners to release more land (and then force/encourage builders to build on it - not sit on it). Another problem is that of the smaller new homes that have been built, most of them have been snapped up for renting, not owning.

So, what’s the answer? Build more Council houses? Yes, sounds great but the local authority haven’t enough money to cut the grass verges, let alone spend billions on new homes in Huddersfield. The Government did relax the planning laws a few years ago, for example for changing office space into residential use, yet they could do more as currently new homes builders have no incentive to build inexpensive homes or bungalows that the system needs to make a difference.

So, what does this mean for Huddersfield homeowners and Huddersfield landlords?

Changing the dynamics of the Huddersfield, regional and national property market will only change in decades, not years.  The simple fact is we are living longer, and we need 240,000 to 250,000 houses a year to stand still with demand, let alone start to eat into 30 years of under building where the average has been just under 170,000 households a year.

That means, today as a country, we have a pent-up demand of 2.25m additional households and we need to build a further 4.2m households on top of that figure for population growth between 2019 and 2039. So, irrespective of whether we have short term blip in the property market in the next 12/18 months, investing in property is, and always will be, a great investment as demand will always outstrip supply.

26% more homes for sale in Huddersfield than a year ago

One of the key factors of the health of the Huddersfield property market is the number of properties for sale at any one time. The issue with housing is that when demand goes up, unlike with a chocolate bar factory, who can add a couple of hours overtime to increase supply/production to satisfy demand, it takes a good 18 months to two years from planning permission to someone moving into a home.  I have talked at length (and proved) in previous articles that we are still not building enough homes in the long term in the Huddersfield area.. yet for the short term, a good indicator is the number of properties for sale and how long they have been on the market.

How long a property has been on the market is important as a guide to how the property market is performing – potential buyers can always find this information on the Rightmove and Zoopla listings (if you don’t know where – drop me an email or message and I can let you know).

So, let’s have a look at what is happening in Huddersfield, both in terms of the number of properties for sale and how long they have been on the market compared to a year ago, then discuss what that means for the current state of play of the Huddersfield property market. So to start, let’s look at the number of properties for sale in Huddersfield compared to a year ago.

 

Interestingly, you can see there has been a proportional increase of 42% in semi-detached properties on the market in Huddersfield, yet only a 2% increase in apartments.. overall in the last year there are 26% more properties on the market in Huddersfield, compared to a year ago. Now, let’s look how long they have been on the market ..

Interesting to see that the biggest jump in the number of days on the market is detached houses, from 149 days to 183 days .. demand and supply working again. Although, the length of time an average Huddersfield property has been on the market has remained the same.

So what does this all mean for Huddersfield Buy To let landlords and Huddersfield homeowners looking to buy and sell?  Well, if you are thinking of selling, as the number of properties on the market has increased and the length of time Huddersfield properties are on the market has remained the same – you have to be mindful that realistic pricing is the key to get the property sold. If you are a buyer, that means you find yourself in a better position to negotiate a good deal on your Huddersfield property purchase.

There is an argument to suggest that property buyers see excessive days on the market as an indication that the seller is becoming desperate to sell because the property hasn’t sold. Buyers are also mindful to believe that there might be something wrong with the home, a defect that caused other buyers to pass it up. This can concern them when they view the property – if they view it at all, as that possible and perhaps made-up defect is on their minds, even if it is sub-consciously.

Normally, both assumptions are wrong. A property can loiter on the market for several reasons. The most common reason for a property sticking on the market is overvaluing or overpricing. In an effort to get the property on the market, some estate agents may have deluded the seller into believing the property was worth more than the property market will bear. Don’t get me wrong, if you don’t ask, you don’t get and homeowners naturally want to get the best price for their home, and so test the market. Yet, if you aren’t getting a steady stream of viewers after a few weeks, then that testing can back fire. You see, by setting the asking price too high to see if they can find someone to pay that inflated price, then finding there is nobody in the market that will pay the price, here lies the biggest trap for house sellers on keeping the inflated asking prices for too long.

Sellers can also get stuck on an asking price and they are willing to wait out the market until it catches up to what they want for their property – yet we aren’t in that type of property market at the moment. Consumer champion Which said that if you have to reduce your asking price by 5% or more, it adds an extra 64 days to the sales process meaning you might lose the property of your dreams.

Also, I have seen countless times, house sellers insist on an inflated asking price, reduce 12 weeks later, yet buyers think there is something wrong with it so the homeowner gets fed up and accepts a lower offer to get the property sold, whereas if the house seller had gone onto the market at the right asking price, they would get much nearer to what they deserve for their property.

So, if you are looking for a bargain to buy – all the Portals (Rightmove, Zoopla and On The Market) allow you to search and sort by the length of time on the market as well as the asking price.. who knows – there could be a bargain waiting for you!

Unemployment - the Secret Driver of the Huddersfield Property Market?

If you have been reading my articles on the Huddersfield property market recently, you will see that in the three years since the referendum of the ‘B’ word (that word is banned in our household), we have proved beyond doubt that it (whose name shall remain nameless) has had no effect on the Huddersfield property market (or the UK as a whole).

So one might ask, what does affect the property market locally? Well many things on the demand side include wages, job security, interest rates, availability of mortgages, confidence in the economy, inflation, speculative demand ... the list goes on. Yet as my blog readers will note, I like to delve deeper into the numbers and I have found an interesting correlation between unemployment and the number of properties sold (i.e. transactions).

Why transaction levels and not house prices? Well just looking at Huddersfield house prices as a bellwether has flaws. Many property market commentators and economists believe transaction numbers (the number of properties sold) give a more accurate and candid indicator of the health of the property market than just house values alone. The reason is twofold. First most people when they sell also buy, so if property values have dropped by 10% or risen by 10% on the one you are selling, it would have done the same on the one you are buying - meaning to judge the health of a property market is very one dimensional. Secondly, the act of moving is very much a human thing. Property habitually conveys a robust emotional connection with homeowners - a connection that few would attribute to their other investments like their savings or stock market investments. Moving home could be described as a human enterprise, moving from one chapter of one’s life to another. When people move home, it shows they are moving forward in their lives and so this gives a great indicator of the health of the property market.

Looking at Kirklees Council figures on the graph, you can see an inverse relationship between unemployment and housing transaction levels.

Property transactions in Huddersfield dropped by 57.74%, whilst unemployment in Huddersfield rose by 56.8% during the 2007 to 2009 Global Financial Crash

Until recently, you can see there has clearly been a relationship between conditions in the Huddersfield job market and the number of people who move home ... interesting don’t you think?

Year	Unemployment % Rate in Huddersfield and Kirklees	Number of Properties Sold in Huddersfield and Kirklees
2004	4.1	8931
2005	4.4	7859
2006	5.1	9788
2007	5.2	9427
2008	6.7	4873
2009	8.1	3984
2010	8.4	4080
2011	8.9	4085
2012	8.3	4271
2013	7.9	4798
2014	6.6	5775
2015	5.9	5830
2016	5.1	5775
2017	4.9	6310
2018	4.9	6120

Now I am not saying unemployment is the only factor influencing the Huddersfield property - but it has to be said there is a link.

As a country (and indeed here in Huddersfield) over the last 40 years, we have seen a shift in the outlook over the purpose of housing and the development of the religion of following house prices (and I appreciate the irony of me writing these articles on Huddersfield - feeding that habit!) Yet, when did owning a home turn from buying a roof over your head to an out and out investment vehicle? I do wish people would stop fretting about their intrinsic value being associated with their Huddersfield home. Now of course, I am not dismissing the current levels of Huddersfield house prices - we just have to take into consideration other metrics alongside them when judging the health of the property market locally.

One final thought, looking on a broader scale in the UK, those towns and cities whose property markets bounced back after the Global Financial Crash had high levels of employment and low unemployment whilst places with high unemployment and relatively low employment have, on the other hand, typically underperformed. 

So the next time you are considering a house move or buying a buy to let property in Huddersfield ... don’t make your judgement on house price growth alone.