Significant increase in older people living alone

According to a new report from the International Longevity Centre, despite significant increases in the numbers of older people living alone, half of all older people with care needs haven’t made adaptations to their homes to make it easier to live in.

Whilst specialist retirement housing can offer more adaptations and play a part in supporting downsizing, new analysis from the think tank finds that the retirement housing supply gap is set to worsen.

The State of the Nation’s Housing is published today by the International Longevity Centre – UK (ILC-UK), and supported by FirstPort, the UK’s largest residential property manager. The report paints a picture of increased under-occupancy and declining average household size:

• Since 2005 there has been a significant increase in the number of 45-64 year olds living alone (500,000) as well as the number of 65-74 year olds living alone (300,000).
• The average household size was 2.9 people in 1971. Today there are on average 2.3 people per household.
• Over 16 million people – mainly owner occupied, middle aged and older households – live in under-occupied housing. 6 million live in houses with 2 or more excess bedrooms.
• The 50 to 64 age group has the highest number of people in under-occupied homes (4.5 million), while the 65-79 age group has the highest proportion.
• Nearly 9 in 10 of the 65-79 age group live in under-occupied housing – over 50% live in homes with two or more excess bedrooms.

But millions of over 50s with care needs haven’t adapted their housing

Population ageing is leading to rising care needs, but these needs are not being met. Since 2008-9 the numbers of older people (aged over 65) receiving care has fallen by 30%, while it has fallen by around 26% for those aged 18-64. As a result there are now half a million fewer people receiving care services than there were in 2008-9.

In 2012/13, there were 1.86 million people over the age of 50 in England who had unmet needs – an increase of 120,000 people (or 7%) since 2006/7. This means that around 1 in 10 people aged over 50 in England has an unmet care need. Less than half of those over 50s with a limitation in an Activity of Daily Living (ADL) live in homes with any health-related adaptations.

Specialist retirement housing could be a solution for some, but new analysis by the ILC-UK projects a shortage of 160,000 retirement housing by 2030

• Those in retirement housing are significantly more likely to be living in homes with adaptations than those who do not. Approximately 87% of those in retirement housing have home adaptations, by comparison to around 60% of other housing.

• The rate of construction of new housing for older people has varied over the years. It peaked in 1989 at 30,000 units but has since fallen back dramatically – averaging around 7,000 new units a year over the last decade.

• There are around 515,000 specialist retirement and extra care homes in England. However, this means that there is only enough specialist housing to accommodate 5% of the over-65 population.

• According to our calculations, there could be a retirement housing gap of 160,000 retirement housing by 2030 if current trends continue. By 2050, the gap could grow to 376,000.

• Among those over 50 who reported having problems with their homes, the most common noise (around 25%) and being too cold in the winter (around 20%).

Making sense of the property market

It has only been a month since the Brexit vote but it actually feels like closer to a year. So much has happened – and in the case of Bank Base Rate cuts, hasn’t happened (yet) – in the last four weeks that you might legitimately feel that the world has been turned upside down, turned back up, and is currently deciding on which axis it should tilt on now.

Just in terms of a political upheaval, you would be hard-pressed to come up with another period in time where so much has changed in so short a time. We all felt the referendum was a seismic moment in UK politics, but I think most deep down felt the ‘status quo’ would triumph in the end. How wrong we were. Since those votes were cast, we’ve seen more comings and goings than a revolving door convention and one gets the sense that there is much more to come, particularly if you’re a member of the Labour Party.

Those of us working within the property market have been trying to make sense of what it means for us, our clients, and our businesses, and the honest truth is that it’s incredibly difficult to say at the moment. We’re in danger of turning the phrase, ‘a period of uncertainty’ into something of a cliché but this is undoubtedly what we’re living through.

The property market is of course reacting and agents will know that better than anyone what that means, whether it’s vendors dropping asking prices, potential purchasers pulling out, or others who pre-referendum were on the verge of making their move now deciding it would be better to take a ‘wait and see’ attitude. One suspects, and I’m hearing this anecdotally, that the purchase market is not reaching dizzy heights at the moment, and with the summer holiday season upon us one must think that this isn’t going to change for a number of months.

 
 

Politically however there may be some positives to hold onto. They come from the first utterances on housing by the new Prime Minister, Theresa May. In her pre-appointment speech in Birmingham she spoke of the need to get more houses built and to get more first-time buyers onto the housing ladder. She said the same in her first speech outside Number 10 – a Government not for the ‘privileged few’ we were told, but for those who wanted to own their own homes. Now, of course, we’ve been here before, for some time now, and the undersupply of new homes in the UK is still huge but will the new PM be able to turn this around and will first-timers benefit the most.

Certainly, the focus on helping first-timers – at the expense of buy-to-let landlords no doubt – which began under David Cameron and George Osborne, does look likely to continue under Theresa May/Philip Hammond. What this actually means in practice however is still vague. Undoubtedly the Help to Buy Scheme – in all its forms – has been viewed as a real success, particularly HTB1 which covers off new builds. That part of the scheme has already been extended until the end of the decade, and it appears likely it will become a permanent part of the housing furniture.

Help to Buy 2 however – the mortgage guarantee element – is due to finish this year, but given everything else on the Government’s plate will it also be extended? I think it might especially as it will need little effort to do so and indeed will at least guaranteed some continued supply of high LTV mortgages, which of course are greatly wanted and needed by first-time buyers.

Other first-time buyer focused policies that might see the light of day include no stamp duty for first-timers at all, Help to Buy housing developments only available to first-time buyers, and more generous support within the Help to Buy ISA. However, the overarching issue – as it has been for so long – is housing supply and until we can have some serious movement here, I suspect we will be playing catch-up for many years to come.

That said, agents should be aware that this could be a much more welcoming marketplace for first-timers and that developers and builders are going to be encouraged to keep building for this demographic. That being the case, it is younger buyers who could be leading the market, and therefore agents might do well to put some serious resources into this sector.

Rents continue to rise in June

The rental market remains resilient in the face of the various economic and political headwinds the sector has faced recently

The index, the most comprehensive data available on the UK’s private rental market, shows that rents agreed on new tenancies across the UK (excluding London) over the three months to the end of June were up by 3.5%, compared to the same period in 2015. In the capital, meanwhile, rents were 3.9% higher.

By contrast, the UK-wide figure for May was 4.4% (6.2% in London). The more modest rental increases seen in June are a continuation of a trend that has developed throughout the first half of the year, with rents rising across much of the UK each month, but at a slower pace than was the case throughout most of 2015; last June, rents were rising at an annual rate of 7.8% (10.1% in London).

The data suggests the private rental sector has responded to the needs and concerns of landlords and tenants alike during the first half of the year. Landlords were hit by higher stamp duty charges on purchases of new property in April, which led to a rush to complete transactions before then – and a spike in the supply of rental property thereafter.

Meanwhile, tenant demand for property has remained strong, particularly given rising house prices and squeezed mortgage availability, and projected growth in the UK’s population suggests this will continue; official projections suggesting this growth will come from both the British-born population and net migration. Nevertheless, the slowing in the pace of rental increases may reflect landlords’ recognition that an affordability ceiling is approaching.

The outlook for the sector will depend in part on the fall-out from the UK’s decision to leave the European Union in June’s referendum. Some economists expect the referendum result to act as a brake on construction in the housing sector, which could exacerbate the current imbalance between demand and supply in the rental market. It is also possible that demand may increase as would-be house buyers opt to wait and see how house prices are affected over the next 12 months and beyond.

HomeLet’s data also suggests that the average length of a tenancy – as measured by how long tenants had occupied their previous rental property – has begun to come down over the past three months. The figures underline the important role that the private rental sector plays in providing a wide range of housing options to those who have not purchased a property.

The June 2016 HomeLet Rental Index reveals that rents continue to rise in almost every area of the country, with 10 out of the 12 regions surveyed seeing an increase over the three months to the end of May.

How old will you be before you buy your ‘forever home’?

New research from first direct finds our homes may no longer be our castles, but they must come with a large kitchen, a private garden, and easy access to a supermarket.

So, how old will you be before you buy your forever home? According to new research by first direct, the most commonly stated age is 40.

With the average age of first-time buyers now 30, this means once they’ve put the first step on the housing ladder people are giving themselves just ten years to find their forever home. The implications of this are highlighted by the fact 60% of homeowners expect to own more than one home before buying their forever home, whereas just 19% of tenants agree.

What’s in a (forever) home?

The first direct research pinpoints what our view of the modern forever home looks like and finds the top two features people demand in their dream home are a large kitchen (52%) and a private garden (47%), ahead of an ensuite bathroom (28%), an actual bath (24%) and a conservatory (19%).

A ‘forever’ home doesn’t need to come with all these features though, as 98% of those who are now living in their forever home have spent a further £20,000 on average on perfecting their home.

When it comes to essential amenities practicality is the name of the game, and the top three are: a supermarket (32%), good transport links (27%) and friends and family (26%). While men and women agree on the most important amenities, lower down the list there are some stereotypical differences. Women are nearly twice as likely to consider local schools when selecting their perfect home, and men sneak a good local pub onto their list of priorities.

Tracy Garrad, chief executive of first direct, explains: “The saying used to be life begins at 40, but with more people buying homes later and also working and living longer we need to reset the dial. There’s an obvious impact on mortgages, but also on savings and loans too. The research highlights a need for more innovation in products and services as millennials demand solutions tailored to fit in with lifestyles which are very different to that of their parents.”

Almost a quarter (24%) of homeowners report having to ‘work more’ in order to purchase their first home, with 13% saying they took out a loan. And despite headlines over the ‘boomerang generation’, just 8% said they’d moved back in with their mum and dad in order to buy (this rises to 15% for 25-34 year olds).

Among those currently renting just 6% would move back in with their parents – with 22% preferring to rent a really cheap property, and 38% planning to work more. Among renters, saving for a deposit is the biggest concern for both women (34%) and men (23%), just ahead of getting a mortgage (women 30%, men 21%).

While 71% say they bought with a spouse or partner, men were more likely to have taken out a loan to help them buy their first home (15% vs 12%) with women more likely to have given something up such as hobbies or habits (16% vs 11%).

Almost half of buyers decide to go ahead within five minutes

New research appears to confirm what many agents have thought for a long time – many prospective buyers take only five minutes during a viewing before deciding to put in an offer and try to purchase the property.

Research involving a survey of 1,000 buyers conducted for the developer Harron Homes found that some 43.1 per cent decide whether a house is or isn’t for them within the first five minutes of a viewing.

The research also lists what turns buyers on – or off – to a property at three different stages – looking online, seeing the property in person from outside, and then viewing the inside.

In terms of online surfing the research says:

– the biggest turn-off is if a listing does not have any pictures or has only low quality photos;

– 46.2 per cent said it was a problem if there was no floor plan online;

– 43.2 per cent said they wanted to see images of every room.

At external viewing stage:

– the research indicates realising upon arrival that there is no parking is a major issue for just over half of respondents;

– sharing of a driveway or garden is another deterrent for over 30 per cent;

– old-fashioned exterior walls such as pebbledash are also a turn off for over a fifth of would-be buyers.

The interior viewing:

– over 50 per cent reported that seeing or smelling damp is the most off-putting problem at this stage;

– the smell of pets can be similarly off-putting

– outdated interior features such as artex ceilings are unappealing;

– noise, a lack of storage, clutter and outdated fittings are also a turn-off to many.

Other complaints about problems during viewings include being pursued too closely around the house, seeing unprepared rooms or gardens which have not been tidied, or anything that could be described as dirty.

‘Chocolate box’ cottages cost up to 3 times the national average

Lords of the manor rarely live in their ancestral homes these days, vicars have largely been dispossessed of their vicarages and ‘serfs’ no longer call cottages home, but the feudal property pecking order is alive and well.

The average price of a manor house is £2,102,344 – 11 times higher than the national average. This is nearly double the average sale price of the next most expensive quintessentially English home, the farmhouse, with an average sale price of £1,089,857. The least expensive of these quintessentially English homes is the cottage.

However, on a square footage basis cottages, with their typically cosy rooms, rustic beams and quaint features, do not offer the best value for money. The stereotypically roomier barn conversion and old rectory come in at around £288 per square foot and £234 per square foot on average respectively. Cottages are more expensive on this basis, at £320 per square foot.

Farmhouses come somewhere in the middle of the feudal pecking order and are the next most expensive home after the archetypal manor house. While manor houses are on average over £1 million more expensive than a farmhouse, manor houses offer better value for money on a price per square foot basis (£343 per square foot) due to their sweeping, spacious rooms.

For buyers looking for bang for their buck when it comes to space, manor houses look like an attractive option, particularly as the average price per square foot (£343) is just £23 more than a chocolate box cottage (£320)!

Barn conversions are a significant £378,066 less expensive than old rectories – that’s more than the average sale price of a typical UK property. However, on a price per square footage basis old rectories offer better value. Barn conversions with their generally large open-plan entertaining spaces fit in well with modern lifestyles and dinner party culture – which is reflected in the square footage premium they attract.manorhouse