Retirees Could Be Asked To Move Out Of Homes
12 October 2015
The Telegraph reports that there may be another way to tackle the housing shortage in the UK according to the head of the Financial Conduct Authority; encouraging the older generation who have paid off their mortgages to move out of their big homes.
Lynda Blackwell (FCA Head of Mortgages) recently stated that more houses should be built for retired people so that this could prompt older people to move out of their homes after paying off their mortgages. She noted that this was a real issue, and that the focus of yielding solutions for the housing crisis should be moved away from first-time buyers to so-called ”last-time buyers”.
The article goes on to say that the average price of a UK property is more than £204,000, according to a report recently. Halifax said a record low number of homes for sale had helped push up the average. The bank also reported a shortage of second-hand properties on the market, combined with the economic recovery and low mortgage rates, are behind the demand.
A survey recently conducted on those who rent showed that half do not believe that they will ever be able to afford to buy their own home. Around 45% of those surveyed for the Post Office Money mortgages doubt they will ever be able to climb up the property ladder. Those who hope to be able to buy at some stage won’t be able to do so until the average age of 36, up from 35 when similar research was conducted last year. South-East England had the highest percentage of renters who do not believe they will ever be able to afford a home, which was 59%, while the East and South-West of England had the lowest at 37%.
The survey also reported that the East Midlands was found to have the highest age at 46 at which first-time buyers thought they would be able to get on to the property ladder. Yorkshire had the lowest with an average age of 31. With house prices continuously on the rise in parts of the country, raising a deposit is seen as the biggest obstacle to getting a foot on the property ladder. UK renters believe on average it would take them 8 and a half years to save enough for a deposit, with 1 in 10 expecting to wait more than a decade.
The Post Office claim there are five reasons why people do not own a home today; they cannot afford the deposit, they cannot afford mortgage repayments, they do not want to own a home, they are currently saving for a deposit or they like the freedom of being able to move when they want. John Wilcock, head of mortgages at Post Office Money, stated that ”it is clear that there is still a long way to go to inspire confidence in the first-time buyers’ market”. Only time will tell if the estimates of this housing crisis will ever improve in the coming years.