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    Are last time buyers the key to unlocking the housing crisis?

    Picture of Nigel Wilson
    Nigel Wilson, CEO of Legal & General
     

    In the election campaign, the main political parties tried to outdo each other with policy goals to build the new homes that the UK desperately needs. The Conservatives spoke about creating 200,000 starter homes. But the post-election reality could be quite different. I suspect there isn’t the political will, nor enough bricks and mortar, to build the 250,000 new homes a year that we require. In last week’s Queen’s Speech the focus was on the government’s ill-advised ‘Right to Buy’ scheme, although their proposals to open up brownfield sites was a positive development.

     

    So in the UK we need to be more creative about making more housing available. Our new last time buyers report (PDF, 3.14 MB) analyses how over 55s with two or more unused bedrooms, account for £820 billion of property wealth.  Our research shows that a third of these older homeowners want to downsize, but only 7% are able to do so, mainly due to a lack of suitable housing. By helping older people move into the homes they want, we can free up larger homes for families. It’s an appalling truth that 62% of English last time buyers want to downsize into a two-bedroom property at the same time as Shelter are reporting that one in four children in London live in overcrowded homes.

    Teapot

    SOME SURPRISING STATISTICS ABOUT LAST TIME BUYERS

     

    • There are 5.3 million under occupied homes in the UK with 7.7 million spare bedrooms
    • 3.3 million last time buyers are looking to downsize
    • 32% of last time buyers considered downsizing in the last five years, but only 7% succeeded in doing so
    • 46% of last time buyers live in detached houses and only 1% live in flats
    • 31% of last time buyers are still living in the first property they ever bought

     

    WHY HOMEOWNERS WANT TO ENJOY RETIREMENT IN A SMALLER HOME

     

    Over 55s often find that their homes no longer meet their needs. Yet they often allow inertia to keep them in a property which is unsuitable for their changing lifestyle. As people get older they find that they can no longer manage looking after a garden or negotiating stairs. Location is also vital. It’s a myth that older people want a dream home in the countryside. Proximity to family and friends and easy access to healthcare and shops are more often found in large towns and cities.

     

    WHY DO SO FEW PEOPLE DOWNSIZE?

     

    Our research showed that the most common reason was a lack of suitable properties, with a severe shortage of appropriate, affordable two-bedroom homes. Property companies are failing to meet the needs of the mid-market, with little available between expensive premium housing and low-cost starter homes. The sheer cost of moving is off-putting and a stamp-duty holiday for people moving in later life is a cost-neutral policy that the government should also consider.

     

    A NATIONAL PLAN TO ESTABLISH HIGH QUALITY HOUSING FOR OLDER PEOPLE

     

    We’re calling for central and local government bodies to work with the housing industry to establish a ten point plan to create a vibrant last time buyers’ market.

     

    1. Consistent policies for the elderly across housing, planning, health and social care
    2. Align retirement housing policy with accommodation needs for elderly social care
    3. More homes with freehold, shared equity and rented options
    4. Greater supply in the mid-market. Not just ‘affordable’ or premium housing
    5. Urban not rural. Homes close to families, friends and facilities. Vertical living is OK.
    6. Tax incentives through stamp duty, council tax and bigger ‘New Homes Bonuses’
    7. Ensuring benefit systems fit together in an understandable way
    8. Planning authorities to prioritise and standardise housing for the elderly and encourage more UK based modular construction
    9. Exemptions for elderly housing from ‘Development Levies’
    10. Unlocking unproductive housing wealth through equity release. Can become a £5 billion market.

     

     

    HOW WE CAN HELP

     

    We’ve already been working to increase housing supply through our relationships with Places for People and Shelter and have invested £2 billion into student accommodation, created affordable homes for key workers, invested into the care home sector and entered the rent to build sector.

     

    We’re ready to invest money into the last time buyers sector. What is needed is for central and local government bodies to collaborate with investors and the property industry to get the last time buyer market moving.

     

    Nigel Wilson

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     What are your thoughts?

    Download the report here: Last time buyers:
    Free up housing stock (PDF: 3.14 MB)
     

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