Royal
Tunbridge Wells people aged over 65 currently hold more housing wealth in their
homes than the annual GDP of the whole of Blackpool … and this is a problem for
everyone in Royal Tunbridge Wells!
Many
retiree’s 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. To add to the woes, in 2014, just 1% of
new builds in the UK were bungalows, according to the National House Building Council - down from 7% in 1996.
My
research has found that there are 5,974 households in Royal Tunbridge Wells
owned outright (i.e. no mortgage) by over 65 year olds. Taking into account the average value of a
property in Royal Tunbridge Wells, this means £2.95 billion of equity is locked
up in these Royal Tunbridge Wells homes, compared to the GDP of the whole of
Blackpool being £2 billion of GDP.
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 Royal Tunbridge Wells’s rapidly ageing population. Regrettably, the Royal
Tunbridge Wells’s housing stock is woefully unprepared for this demographic
shift to the 'stretched middle age’, and 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.
Interestingly,
adding insult to injury, the problem will only get worse, as in the 50 year old
to 64 year old homeownership age range there are an additional 3,839 Royal
Tunbridge Wells households that are mortgage free and a further 3,607 Royal
Tunbridge Wells households who will be completing their mortgage
responsibility. With Government projections showing the proportion of over 65’s 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 Royal Tunbridge Wells
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, 240,000 properties to be built 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
Credit Crunch (2009), that has only been between 130,000 and 145,000 households
a year.
The solution …. release more land for starter homes, bungalows
and sheltered accommodation because 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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