The elderly are denying younger people access to the property ladder by spending a long time in their under-occupied homes, it is claimed.
Nationwide Building Society comments that economic uncertainty is affecting the housing market, with existing homeowners feeling the squeeze and potential first-time buyers experiencing a knock-on effect.
The mortgage lender remarked that homeowners in the 55 to 64 age bracket have lived in their abodes for an average of 17 years.
Older owners tend to remain in their homes after their children leave, not wanting to ‘downsize’ in an era of economic uncertainty. As a result, an increasing number of elderly owned homes now possess two or more uninhabited bedrooms. This trend is seen among two-thirds of owners over 65.
ES throws more light on the matter here: https://www.homesandproperty.co.uk/property-news/uk-house-prices-over65s-in-big-homes-blocking-housing-ladder-for-young-buyers-as-market-continues-to-a132406.html.
Nationwide remarked that 54% of owner-occupied homes are now under-occupied, a rise from 42% in 2000.
Robert Gardner, Nationwide chief economist, said that housing stock is not being efficiently used. Younger first-time buyers who are looking for houses and ‘leapfrogging’ small starter flats cannot find suitable properties.
The Land Registry recently produced figures showing that the prices of flats and maisonettes have dropped, while house prices, and in particular those of detached properties, have grown.
First-time buyers are aged on average 33, and this fact and the huge cost of house buying may explain the preference of this group for houses over flats.
Insight director at Zoopla, Richard Donnell, commented that younger buyers are seeking a property they can live in for years, just like older generations.
However, getting on the property ladder is by no means guaranteed. A report by Santander sounded a warning note that only a quarter of the younger generation will be able to own their own property by 2026.
Stamp duty reduction?
Nationwide suggested that the government should reduce stamp duty to stimulate downsizing among older homeowners who could sell their larger properties, making for more efficient employment of housing stock.
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Low turnover rates have also inhibited housing price rises. Figures from Nationwide show that house prices in the UK rose just 0.3% on average in July. This is the eighth month in a row in which growth in house prices has been below 1%.