Can the baby boomers help to shake up the property ladder?
As first-wave baby boomers have either just entered or are approaching retirement age, there has been increased focus within the property industry on so-called ‘last-time buyers’. The Financial Times noted last week that, according to figures from the National House Building Council, more retirement homes have been built in the first half of 2015 than in all of 2014.
Mike Jennings, Group Operations Director for McCarthy & Stone, the country’s biggest specialist retirement housebuilder, said: “More has to be done to address the needs of last-time buyers. There is a chronic undersupply of specialist retirement housing in the UK. We would like to see a national strategy for retirement housing and stronger government policies to support its provision.”
While the building of more specialist retirement homes would help to deal with the direct shortage of this type of property, the additional benefit is that it enables larger family homes to come onto the market.
Figures released by the National House Building Council show the majority of new home buyers are aged 25-44 (54%) – all of whom should benefit most from the freeing up of existing family homes. There are local political advantages too: as retirement properties tend to be built within walking distance of local shops and amenities, town centres would benefit from investment and regeneration; retirement developments often take place on brownfield sites, helping reduce pressure to build on green fields or the Green Belt.
Legal & General, the financial services company, published an extensive report in June this year which highlighted that just 1% of the UK population lives in retirement flats. The most common reasons for those who had considered downsizing, but hadn’t, were the lack of suitable properties (25%), the lack of affordability (21%), and the cost of stamp duty (21%).
Given these reasons, it is understandable why there are calls for the Government to do more for the sector. Encouraging the use of brownfield sites for this type of development in town centres, or possibly scrapping stamp duties for residents moving into a retirement property could help to address the reasons why people are avoiding downsizing.
The Government itself has been directing more resources at first-time buyers, and encouraging councils to finalise their Local Plans and identify land that can be developed for housing, which has put pressure on the Green Belt. It has long been stated by McCarthy & Stone that the freeing up of family homes has a trickle-down effect which helps those at the bottom of the property ladder. If the large increase in retirement housing being built is maintained, it will be interesting to see if there is a positive effect on the whole property market over the next few years, and whether addressing the shortage of retirement homes becomes more of a priority for the Government.
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