Interesting
fact ……Falmouth people aged over 65 currently hold more housing wealth in their
homes than the annual GDP of the whole of the Isle of Anglesey. 'Yachi Da' I say!
This creates a problem since many retiree’s want to move but
cannot. This is because 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, according to the National
House Building Council, just 1% of new builds in the UK were bungalows, down from
7% in 1996! Locally, aside from
Roscarrick Gardens to the edge of Falmouth I can’t think of a single
development of bungalows built in the last 15 years?
My research
has found that amongst the over 65’s in Falmouth they own 3,097 houses outright
(i.e. no mortgage). Based on average value of a property in Falmouth,
it is likely that £1.05 billion of equity is locked up in these Falmouth homes.
The GDP of the whole of the Isle of Anglesey is £797 million! Yachi do!
A recent survey by YouGov, found that 36% of people aged
over 65 in the UK are looking to downsize to 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 Falmouth’s rapidly ageing population. Regrettably, the Falmouth’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. I’m not laughing because along with my co-directors
we are careering towards this age group ourselves!
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. The chain of supply for housing
therefore stutters along.
Interestingly, adding insult to injury, the problem will
only get worse. In the 50 to 64-year old homeownership age range there are an
additional 1,875 Falmouth households that are mortgage free and a further 1,483
Falmouth 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 Falmouth 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) as a
Country we need 240,000 properties to be built annually just to stand still! In the 1990’s and early 2000’s, the Country
was building on average 180,000 to 190,000 households a year; since the
Credit Crunch in 2009, that has only been between 130,000 and 145,000 households
a year.
The solution although politically sensitive for all of us that like our beautiful countryside, is to release more land for starter homes, bungalows
and sheltered accommodation. Currently land prices are ‘killing’ the
housing market as large firms dominating the construction industry are more
likely to focus on traditional houses and apartments. Their accountant decision
makers inevitably want to pack the properties in and it is unsurprising that the floor area of UK properties are smaller than anywhere else in Europe.
My opinion - If you can get your hands on a bungalow, this could
be a decent investment bet for future. Either that or put a few quid
into Stannah stairlifts (other lift companies are available to invest in too).
NOTES
1.
‘Yachi
Da’ – Welsh translation Good health. Perhaps should read good wealth!
2.
When I say GDP – as your town isn’t a country
– so strictly speaking - there can’t be a GDP of a town. (Although everyone
knows the phrase GDP. The official Office of National Stats term for the GDP of
a domestic location (i.e. your town) is the Gross Value Added (GVA)
stat. The GVA is the grand total of all revenues, from final sales and (net)
subsidies, which are incomes into businesses. I personally believe there is no
need to change the article – but if you are asked – you have the answer to
hand.
3.
Numbers on Homeownership and OAP’s from 2011 Census
4.
Average Value of Property from Zoopla
5.
Average floor Area University of Cambridge study 2014
reported in The telegraph by Miranda Prynne 18 June 2014.
6.
Future Population Stats – Office of National
Statistics (ONS)
7.
Household Building Stats - ONS
