People aged over 65 in Rotherham currently hold more housing wealth in their homes than the annual GDP of the whole of the Isle of Anglesey… this is a problem for everyone in our area.
Many of the retired want to move but cannot, as there is a shortage of such homes for mature people to downsize into. Due to the shortage, bungalows command a 10% to 20% premium per square foot over houses of the same size with stairs.
In 2014 just 1% of new builds in the UK were bungalows – down from 7% in 1996 (National House Building Council).
My research has found that there are 10,852 households in Rotherham owned outright (i.e. no mortgage) by over 65 year olds. Taking into account the average value of a property in Rotherham, this means £1.59 billion of equity is locked up in these Rotherham homes (the annual GDP of the whole of the Isle of Anglesey is £797 million).
36% of people aged 65+ are looking to downsize into a smaller home.
A recent survey by YouGov, found that 36% of people aged over 65 in the UK are looking to downsize into a smaller home. However, the Government seems to focus all its attention on first-time buyers with strategies such as Starter Homes to ensure the youngsters of the UK don’t become permanent members of ‘Generation Rent’. Conversely, this overlooks the chronic under-supply of appropriate retirement housing essential to the needs of the rapidly ageing population.
Regrettably, the Rotherham’s housing stock is woefully unprepared for this demographic shift to the ‘stretched middle age’ – this has created a new ‘Generation Trapped’ dilemma where older people cannot move.
Some OAP’s who are finding it difficult to live on their own, are unable to leave their bungalow because of a lack of sheltered housing and ‘affordable’ care home places. So, older retirees can’t leave bungalows, younger retirees can’t buy bungalows and younger people can’t buy family houses.
Adding insult to injury, the problem will only get worse.
In the 50 year old to 64 year old homeownership age range there are an additional 8,110 Rotherham households that are mortgage free and a further 6,664 Rotherham households who will be completing their mortgage responsibility.
With Government projections showing the proportion of over 65s will rise by over a third from the current 17.7% to 24.3% of the population in the next 20 years… this can only add greater pressure to the Rotherham property market.
House prices have rocketed over the last 40 years because the supply of property has not kept up with demand. With migration, people living longer and high divorce rates (meaning one family becomes two) we need, as a country, to build 240,000 properties a year to just stand still.
In the 1990’s and early 2000’s, the Country was building on average 180,000 to 190,000 households a year, but since the 2009, that has only been between 130,000 and 145,000 households a year.
What’s the solution?
More land needs to be released for starter homes, bungalows and sheltered accommodation. Land prices are killing the housing market as the large firms dominating the construction industry are more likely to focus on traditional houses and apartments.
My opinion: until the Government change the planning rules and allow more land to be built on bungalows could be a decent bet for future investment as they continue to attract ever growing premiums…
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