Increased levels of downsizing are set to play an important part in the housing market in the UK and it is claimed that building bungalows could be the answer.
The trend is expected to free up good quality family housing and releasing some of the housing equity of older generations that can be used to help younger generations on the housing ladder.
According to an analysis by real estate consultants Savills, some 55,000 households could downsize each year in the current market, releasing equity of around £7 billion that will help to feed the £3.5 billion of financial support given to first time buyers.
As the market picks up over the next five years that could increase to around 90,000 households releasing equity of £14.6 billion, assuming that the pressure to help younger generations on or up the housing ladder remains.
But historically one of the constraints on downsizing has been the lack of suitable stock for them to acquire. The firm points out that only 0.7% of properties advertised in the first quarter of this year on Rightmove were dedicated retirement housing. By comparison bungalows made up 9.2% of all advertised stock.
So one solution being put forward is to build more single storey homes to help solve the housing needs of older generations who are sitting on an untapped mountain of housing wealth.
Bungalows tend to be coastal or typical retirement hotspots indicating strong demand from downsizers. But the Savills research has found that these properties come at a price premium.
'Our calculations show that the average two bed bungalow has an asking price of £180,000, typically 24% above all two bedroom accommodation in the same local authority area,' said Savills director of residential research Lucian Cook.
'That reflects the fact that a lot of the existing stock has redevelopment potential not least because of the ability to extend upwards within the context of relatively large plots, meaning competing demand from growing families,' he pointed out.
'I have first hand experience in this area. My own parents now aged in their 70's live in a bungalow in one of the finest parts of rural Somerset. It perfectly meets their needs. But it also did when they were bringing up a family and the much larger farmhouse next door continued to be occupied by my grandparents,' he added.
Cool does not think that bungalows are a silver bullet solution. 'That they carry a premium, means less wealthy downsizers will find more difficult to unlock value if they set their heart on single storey living,' he said.
'Furthermore bringing more new bungalows to the market is not easy, not least because of the relatively high development cost and limited viability of relatively low density development. That indicates that planners and developers need to look at a range of products to meet the needs of home owners in retirement, especially in urban areas,' added Cook.
He concluded that where new bungalows are provided to meet the needs of older generations, there will probably need to be occupancy conditions attached to avoid them been swallowed up by the general market
. propertywire
The trend is expected to free up good quality family housing and releasing some of the housing equity of older generations that can be used to help younger generations on the housing ladder.
According to an analysis by real estate consultants Savills, some 55,000 households could downsize each year in the current market, releasing equity of around £7 billion that will help to feed the £3.5 billion of financial support given to first time buyers.
As the market picks up over the next five years that could increase to around 90,000 households releasing equity of £14.6 billion, assuming that the pressure to help younger generations on or up the housing ladder remains.
But historically one of the constraints on downsizing has been the lack of suitable stock for them to acquire. The firm points out that only 0.7% of properties advertised in the first quarter of this year on Rightmove were dedicated retirement housing. By comparison bungalows made up 9.2% of all advertised stock.
So one solution being put forward is to build more single storey homes to help solve the housing needs of older generations who are sitting on an untapped mountain of housing wealth.
Bungalows tend to be coastal or typical retirement hotspots indicating strong demand from downsizers. But the Savills research has found that these properties come at a price premium.
'Our calculations show that the average two bed bungalow has an asking price of £180,000, typically 24% above all two bedroom accommodation in the same local authority area,' said Savills director of residential research Lucian Cook.
'That reflects the fact that a lot of the existing stock has redevelopment potential not least because of the ability to extend upwards within the context of relatively large plots, meaning competing demand from growing families,' he pointed out.
'I have first hand experience in this area. My own parents now aged in their 70's live in a bungalow in one of the finest parts of rural Somerset. It perfectly meets their needs. But it also did when they were bringing up a family and the much larger farmhouse next door continued to be occupied by my grandparents,' he added.
Cool does not think that bungalows are a silver bullet solution. 'That they carry a premium, means less wealthy downsizers will find more difficult to unlock value if they set their heart on single storey living,' he said.
'Furthermore bringing more new bungalows to the market is not easy, not least because of the relatively high development cost and limited viability of relatively low density development. That indicates that planners and developers need to look at a range of products to meet the needs of home owners in retirement, especially in urban areas,' added Cook.
He concluded that where new bungalows are provided to meet the needs of older generations, there will probably need to be occupancy conditions attached to avoid them been swallowed up by the general market
. propertywire
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