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Generation of UK home owners stuck due to lack of downsize properties
A lack of suitable homes for downsizing is preventing a large number of home owners in the UK from moving to a smaller property, it is claimed. Some 33% of home owners aged 55 and over are considering or expect to consider downsizing, but a lack of suitable options is preventing them from moving, a new report says. A new YouGov survey for the report found 29% who have already downsized or are considering or expecting to consider downsizing did or expect to release in excess of £100,000 in equity, with the most prevalent way of using the money being to put it in a savings account. The report, Generation Stuck: Exploring the Reality of Downsizing in Later Life, has been written by the International Longevity Centre UK and commissioned by retirement house builder McCarthy & Stone. The report suggests that a 'Generation Stuck' dilemma is being created by a substantial number of older people who want to move and downsize, but can't due to a lack of choice in the market place. A chronic under supply of suitable properties for later life, including purpose built retirement housing, means the UK is running out of homes for its ageing population, leaving them stuck in under occupied properties unsuited to their needs. According to previous research findings some 52% of all people who classify as under occupiers in the UK are aged 55 and over and at current market trends, it would take 20 years for housing supply, at its current rate, to meet the demand of just half of people aged 60 and over interested in downsizing. As part of the report, a new YouGov survey found 48% of the 1,252 home owners surveyed would consider downsizing or have already moved to a more suitable property, making this an area worthy of much greater policy consideration by Government. Of those who have already downsized or are at least considering downsizing some 56% wanted to do so to spend less on property maintenance, 43% wanted to reduce their bills and 43% wanted to move as their children had left home. The finding that almost three in 10 home owners aged 55 or over expect to release more than £100,000 in equity from downsizing is reinforced by McCarthy & Stone's figures which show its home owners released an average of almost £60,000 in equity when downsizing to a retirement apartment, with 19% releasing more than £100,000. The report also details how these home owners used, or plan to use, such equity. Some 35% wanted to put it into a savings account, 30% to enhance their day to day life, and 19% to give it to family members. Of those aged 55 to 59 34% wanted to put it towards a pension. ‘Housing and planning policy should not just be about starter homes. Millions of older people want to downsize to more suitable housing but there is currently little incentive or choice for them to move…. Continue reading
UK buyers taking longer to make up their minds than a year ago
Property buyers in the UK are taking longer to make up their mind about a home with many taking a second or even a third viewing before making an offer, new research has found. On average it now takes 53 minutes of viewing a property, up from 38 minutes a year ago, according to the research from online estate agent eMoov. Indeed, just 6% make an offer after the first viewing. The majority of buyers, 53%, return for a second viewing, with a further 41% feeling the need to view a property more than twice. Buyers in London are more likely to seek a third viewing. The research also suggests that buyers undertake a considerable amount of research before they view a property. Some 67% read the full property description before arranging to view and 59% look at other properties listed in the area. It also found that 56% check out the road where the property is on Google street view, 53% take a detailed look at the floor plan and room sizes, 49% research the local amenities, 44% research the historic value of a property or surrounding properties and 25% check out schools. ‘UK buyers are taking that extra bit of time viewing a property, before submitting an offer. Although demand is still high in a number of areas, particularly London and the surrounding areas, the market isn’t quite as competitive as it has been in previous years, so many potential buyers are opting for a second or third viewing before committing to a property,’ said the firm’s chief executive officer Russell Quirk. ‘It makes sense given the enormity of such a decision and with buyers not feeling as pressured, there is no need to rush to submit an offer and secure a property after the first viewing,’ he added. But he pointed out that the data shows that there are still those 6% of buyers that will view a property for less than 10 minutes, before deciding to buy it. ‘This still amazes me but highlights the speed the market can move at, in the areas where demand is still outstripping supply,’ said Quirk. Continue reading
Demand from buy to let landlords for remortgages likely to rise in 2016
Buy to let remortgage transactions outstripped purchases by more than two to one in 2015 but this could be reversed in 2016, according to the latest industry sector index report. Remortgages for vanilla buy to let property accounted for 64% of transactions with Houses in Multiple Occupation (HMOs) and Multi-Unit Freehold Blocks (MUFBs) seeing even greater remortgage activity at 78% and 88% of transactions respectively, the data from specialist brokers Mortgages for Business shows. The results aren’t surprising, according to David Whittaker, managing director of Mortgages for Business. ‘For some time now landlords have been making considerable savings through remortgaging. Many have also been releasing equity to make improvements and plan further purchases,’ he said. ‘However, I anticipate that we will see a reversal of this trend in the first quarter of this year as landlords hurry to expand their portfolios before the stamp duty surcharge kicks in on 01 April,’ he explained. ‘The number of enquiries for purchase finance is already well ahead of where we were this time last year, particularly from those looking to sell their personally owned property into a corporate vehicle,’ he added. Although yields across all property types rallied in the fourth quarter of 2015, in real terms they continue to plateau as rental income fails to keep pace with rising property prices. However, returns for the more complex properties remain healthy and well above the psychologically important 6% mark. The number of lenders operating in the market remained static at 33. However, the number of buy to let mortgage products available to borrowers grew slightly to an average of 975. ‘It is unlikely that this average figure will be topped going forward unless new lenders enter the market, or some of the existing providers start to offer products to limited companies. Of course, that figure is only an average, at one point at the beginning of December our tracking system showed 1,168 products,’ Whittaker pointed out. Continue reading
