Yes, that number is staggering isn’t it ….
In this week’s article on the Luton property market, I consider what effect the lack of bungalows and affordable sheltered accommodation is having on the older homeowners in Luton, how it’s affecting everyone in the housing ladder and where opportunities might lay for savvy Luton property investors to make some money due to the imbalance of supply and demand.
Of the 16,145 households in Luton where the head of the household is 65 years or older, an astounding 12,403 (or 76.8%) of those are owned, which is just above the national average of 74.1%, which sounds great – yet nothing could be further from the truth.
I chat with many Luton pensioners who would like to move but cannot, as there is a scarcity of such properties for Luton mature people to downsize into. Due to their scarcity and high demand, Luton bungalows on average get a 12% to 22% premium per square metre premium over two storey properties. To add insult to injury, a recent NHBC reported that only 1% of new builds in the Country were single storey bungalows (compared to 7% in the mid 1990’s).
Luton OAP’s are sitting on £3,211.1m of equity in these Luton homes
In a survey conducted a couple of years ago by YouGov, they established that just over one third of homeowning people aged 65 and over in the Country were looking to downsize into a smaller home. Yet, the Tory’s over the last nine years have appeared to target all their attention on first-time buyers with stratagems such as Starter Homes to safeguard the youngsters of the UK not becoming perpetual members of ‘Generation Rent’. Equally though, this doesn’t address the long-lasting under-supply of suitable retirement housing essential to the needs of the Luton’s hastily ageing population. Lamentably, the Luton’s housing stock is tragically unprepared for this demographic shift to the 'overextended middle age’, and this has created a new 'Generation Confined’ quandary where older people cannot move.
Also, those older Luton retirees’ who do live in the limited number of Luton bungalows are finding it difficult to live on their own, as they are unable to leave their bungalow because of a lack of sheltered housing and ‘affordable’ care home places.
Meaning those older Luton retirees can't leave their Luton bungalows, younger Luton retirees in their larger 2 storey family houses can't buy those Luton bungalows (occupied by the older retirees) and those Luton people in the 30’s and 40’s can't buy those larger 2 storey family houses (occupied by the younger retirees) they need to for their growing families ... it’s like everyone is waiting for everyone because of the bottleneck at the top.
For those wanting to see the complete stats for Luton as whole …
Luton’s (and the rest of the UK’s) property prices have soared over the last 50 years because the number of properties built has not kept up with demand. With restrictive planning regulations, migration, people living longer and excessive divorce rates (meaning one family becomes two) we need, as a Country, 240,000 properties to be built a year since the Millennium to just stand still.
At the turn of the Millennium, the Country was constructing on average 180,000 to 190,000 households a year, that figure dropped in the five years after the Credit Crunch to 135,000 and 145,000 households a year. Although we built 217,000 last year, we still have all those 19 years to make up for.
The answer …. allow more land for starter homes, bungalows and sheltered accommodation because land prices are stifling the property market as the large building firms are more likely to focus on traditional houses and apartments than bungalows (because they make more money from them).
My thoughts for the savvy Luton property investors – until the Government change the planning rules and allow more land to be built on – Bungalows, especially ones that need some TLC after someone has passed away bungalows are a great bet for flipping and even potential rental returns for future property investment as more and more OAP’s will be renting in the decades to come?