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UK group suggests special help for oldies to downsize and free up family homes
A group of politians in the UK have called for older home owners to be given support to help them move home so that more properties can be made available for families. According to the All Parliamentary Group on Housing and Care for Older People a Help to Buy style equity loan scheme and stamp duty exemption would encourage older people to downsize. The claim follows an analysis revealing a third of over 60’s would downsize if it was easier, but up to half of older home owners are priced out of local retirement housing. Their report argues that a Help to Move equity loan would help older homeowners with lower value properties ‘bridge the gap’ between the value of their home and the purchase price of a new retirement property. It also said that many older people cannot easily access mainstream mortgage lending, even when they can afford the repayments. The report goes on to argue that exempting older people purchasing homes worth up to £250,000 from stamp duty would reduce their transaction costs, while leading to a net gain for the Treasury because of the consequent moves in the property market. It also points out that the ‘guidance guarantee’, to be brought in with new pensions freedoms next year, as well as a new duty on local authorities to provide care advice, should be wrapped into a comprehensive package together with housing advice, helping older people make decisions about where and how they live after retirement. The report cites analysis by the think-tank Demos revealing 58% of over 60s, equal to around eight million people currently living in seven million homes, are interested in moving. A third of over 60s specifically wanted to downsize, while a quarter said they were interested in buying a retirement property. If ‘Help to Move’ encouraged all those wanting to downsize to move home researchers calculate that 4.3 million family homes would be freed up, easing the pressure on the housing market. However, between 40 to 50% of older home owners aren’t able to afford to downsize in their local area as their family home is not worth as much as new retirement housing, making additional financial support crucial for many older people in lower value properties. The group points to land prices, an overall lack of supply, and limited availability of ‘shared ownership’ options as reasons why retirement housing is unaffordable for many older people. ‘More and more people in their extended middle age are thinking about downsizing. This can mean much reduced fuel bills and maintenance costs, perhaps the release of some capital, and can prevent a forced move in later life. But down-sizing is not easy,’ the group’s chair Lord Best. ‘Our report recommends a Help to Move package of Stamp Duty relief, financial advice and mortgage support like the Help to Buy assistance for younger purchasers to generate the demand that will get more high-quality homes built for this age group,’ he added. Claudia Wood, chief executive of the… Continue reading
England sees 10% rise in new homes, still way short of demand
The number of new homes in England increased by 10% from 2012 to 2103, official figures show but experts are still warning that this is not enough to meet demand. The increase to 136,620 new homes still this leaves net house building in England 39% below the 2007/2008 peak of 223,530 new homes. The data from the Department for Communities and Local Government shows there were 130,340 new build homes, 4,470 from conversions and 12,520 from changes of use. There were also 1,330 other gains and a loss of 12,520 through demolition. The data also show that greater London has seen the faster progress with 12% annual growth in the number of net new homes built in the capital. A net 23,580 new homes built in London represent 17% of all those built in England in 2013/2014 with Newham and Southwark leading the way for new homes over the last year, seeing 1,970 and 1,650 extra homes respectively. Andrew Bridges, managing director of specialist London estate agents Stirling Ackroyd, pointed out that nothing else can solve a fundamental shortage of homes in the long run, apart from building more. ‘People are beginning to believe they could be better off at this point next year. But in terms of affording a home, the financial marathon is far from over and this is particularly true in our capital city,’ he explained. He pointed out that while it is encouraging to see such a pick-up for the new homes industry, even with 10% growth per year it would be 2020 before as many homes are being built each year as in 2008. ‘Accelerating this progress will be vital, with even more homes near transport and jobs. Nowhere is this squeeze more tightly felt than in London,’ said Bridges. Research by his firm shows areas in Southwark, Hackney, Tower Hamlets and Newham will lead the way for new homes over the next decade. ‘So the fact that two of these boroughs are already leading London’s home building effort is encouraging. But opportunities abound and the demand is there for hundreds of thousands of new homes,’ he said. ‘London’s economy is moving faster than ever, more than playing its part in the UK’s wider recovery. But keeping that dynamo spinning will require homes for the millions working to make that reality. Developers now appear to be rising to the challenge,’ he added. Continue reading
UK construction industry gets boost from improved home lending
The UK government’s Help to Buy scheme and a renewed willingness by banks to lend to home owners has boosted the construction industry, it is claimed. The latest official figures from the Office of National Statistics shows that output in the construction industry in the third quarter of 2014 increased by 0.8% compared to the previous quarter. The ONS data also shows growth of 2.9% between the third quarters of 2013 and 2014, the sixth consecutive period of annual quarter on quarter growth. Most recently, in September 2014, output in the construction industry was estimated to have increased by 1.8% compared with August 2014, following a fall of 3% in August and an increase of 2% in July. On the year, the picture is of continued growth, with output in the construction industry increasing by 3.5% in September 2014 compared with September 2013. Housing, as a sub-element of all construction output, was worth £6.77 billion in the third, up 5% on the second quarter and 22% higher than in the third quarter of 2013. Within housing, output by the private sector has grown 19% since the third quarter of last year, while construction by public organisations grew by 35% on an annual basis According to David Newnes, director of Your Move and Reeds Rains estate agents, The Help to Buy scheme and a renewed willingness on the part of banks to lend to borrowers with smaller deposits played a significant part in boosting demand all across the country, giving first time buyers a better shot at the goal of home ownership. ‘This injected new energy into the construction sector, but although house building is making headway across the pitch, we’re still a long way from seeing the form that was in evidence before the crash,’ he said. He pointed out that households received a welcome boost in the cost of living game with the news that wage growth is beating inflation, but dogged demand for housing must be matched with a new charge of supply if the cost of housing is to be kept within the grasp of new buyers. ‘House price inflation may have been reined back from the intensity witnessed earlier this year, but in the long term building new homes remains key to ensuring that competition over available property and price rises stay at healthy levels, and don’t eat away at consumer confidence,’ he explained. ‘Higher LTV lending dipped last month, as new loan to income caps came into force. We need to ensure that the bottom of the market stays firm, anchored on a solid bedrock of plentiful supply of starter homes,’ he added. Andrew Bridges, managing director of specialist London estate agents Stirling Ackroyd, believes that gradual progress won’t be enough for the construction industry. ‘This growth is still slower than the rest of the economy and not yet fast enough to capture the true scale of opportunity,’ he said. ‘Homes are most sharply sought after, and that’s reflected in the best figures for the housing portion of output… Continue reading
