Should the 11,176 home owning OAP’s of Bexhill-On-Sea be forced to downsize?

This was a question posed to me on social media a few weeks ago, after an interesting discussion with some clients about our mature members of Bexhill-On-Sea and the fact many retirees feel trapped in their homes. After working hard for many years and buying a home for themselves and their family, the children have subsequently flown the nest and now they are left to rattle around in a big house. Many feel trapped in their big homes (hence I have dubbed these Bexhill home owning mature members of our society, ‘Generation Trapped’).

So, should we force OAP Bexhill homeowners to downsize?

Well in the original article, I suggested that we as a society should encourage, through building, tax breaks and social acceptance that it’s a good thing to downsize. But should the Government force OAP’s to do so?

One of the biggest reasons OAP’s move home is health (or lack of it).

Looking at the statistics for Bexhill-On-Sea, of the 11,176 homeowners who are 65 years and older, whilst 6,146 of them described themselves in good or very good health, a sizeable 3,806 home owning OAPs described themselves as in fair health and 1,224 in bad or very bad health.

10.95% of Bexhill home owning OAP’s are in poor health

But if you look at the figures for the whole of Rother District Council (not just Bexhill), there are only 696 specialist retirement homes that one could buy (if they were in fact for sale) and 636 homes available to rent from the Council and other specialist providers (again- you would be waiting for dead man’s shoes to get your foot in the door) and many older homeowners wouldn’t feel comfortable with the idea of renting a retirement property after enjoying the security of owning their own home for most of their adult lives.

My intuition tells me the majority ‘would be’ Bexhill downsizers could certainly afford to move but are staying put in bigger family homes because they can’t find a suitable smaller property. The fact is there simply aren’t enough bungalows for the healthy older members of the Bexhill population and specialist retirement properties for the ones who aren’t in such good health … we need to build more appropriate houses in Bexhill.

 

The Government’s Housing White Paper, published a few weeks ago, could have solved so many problems with the UK housing market, including the issue of homing our aging population. Instead, it ended up feeling annoyingly ambiguous. Forcing our older generation to move with such measures as a punitive taxation (say a tax on wasted bedrooms for people who are retired) would be the wrong thing to do. Instead of the stick – maybe the Government could use the carrot tactics and offer tax breaks for downsizers. Who knows – but something has to happen?

…and come to think about it, isn’t the word ‘downsize’ such an awful word?  I prefer to use the word ‘decent-size’ instead of ‘down-size’- as the other phrase feels like they are lowering themselves, as though they are having to downgrade themselves in their retirement (and let’s be frank – no one likes to be downgraded).

The simple fact is we are living longer as a population and constantly growing with increased birth rates and immigration. So, what I would say to all the homeowners and property owning public of Bexhill is … more houses and apartments need to be built in the Bexhill area, especially more specialist retirement properties and bungalows. The Government had a golden opportunity with the White Paper – and were sadly found lacking.

And a message to my Bexhill property investor readers whilst this issue gets sorted in the coming decade(s)  – maybe seriously consider doing up older bungalows – people will pay handsomely for them – be they for sale or even rent? Just a thought!

Headline image used with the kind permission of Sharon Glam Ma Webster.

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Bexhill’s housing affordability hits a ratio of 11.29 to 1

A Bexhill homeowner emailed me last week, following my article posted in the Bexhill Property Blog about the change in attitude to renting by the youngsters of Bexhill and how they thought it was too expensive for first time buyers to buy in Bexhill.  There can be no doubt that buy to let landlords have played their part in driving up property values in Bexhill (and the UK) and from that made housing a lot less affordable for the 20 and 30 somethings of Bexhill.

In the email, they said they thought the plight of the first-time buyers in Bexhill was like a novice tennis player, playing tennis with Andy Murray. If you played him once you will unquestionably lose and if you were to play him 100 times you would lose 100 times. That is what they thought it was like for all the 20 something’s first time buyers of Bexhill going against all the buy to let landlords.

They continued by asking if the Bank of England (BoE) should be tasked to control house price inflation in the same way as the BoE controls inflation.  The BoE has a target for the annual inflation rate of the Consumer Prices Index of 2%, whilst it is also required to support the Government’s economic policy, including its objectives for growth and employment.  So, should BoE be charged with containing buy to let housing market, by possibly changing the rules on the loan-to-value (LTV) ratio’s?

So, let’s look at how affordable Bexhill is?  The best measure of the affordability of housing is the ratio of Bexhill Property Prices to Bexhill Average Wages, (the higher the ratio, the less affordable properties are).   (i.e. looking at the table below, for example in 2014, the average value of a Bexhill property was 11.82 times higher than the average annual wage in Bexhill).

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 (EST)
5.31 6.46 6.89 9.55 9.96 10.48 10.59 9.72 11.82 11.29

This deterioration in affordability of property in Bexhill over the last couple of years has been one of the reasons why the younger generation is deciding more and more to rent instead of buy their own house.

… but it’s not the only reason.

A quick look on Money Supermarket today found 169 lenders prepared to offer 75% LTV Buy to let Mortgages and none at 85% LTV.  Lenders have self-imposed a high level of entry for buy to let landlords (i.e. putting down at least 25% of the purchase price in cash).  The BoE don’t need to meddle there!  Also, the Tories have certainly done lots to level the playing field in favour of first time buyers.  For nearly a year now, Landlords have had to pay an additional 3% in stamp duty on any buy to let purchase and over the coming four years, tax rules on landlord’s claiming mortgage interest relief will affect their pocket.  Neither, it doesn’t help that the local Authority sold off council houses in the Thatcher years and so for many on low incomes or with little capital, owning a home has simply never been an option (today or in the past).

It’s easy to look at the headlines and blame landlords.  First time buyers have been able to access 95% LTV mortgages since 2010, meaning even today, a first-time buyer could purchase a 2 bed apartment in Bexhill for around £125,000 and only need to find £6,250 deposit.  Yes, a lot of money, but first time buyers need to decide what is important to them.

I think we as a Country have changed … renting is returning to be the norm.  So my opinion is, landlords have it tough.  Let’s not blame them for the ‘perceived’ woes of the nation … because to be frank … we haven’t always been a country of homeowners.  Roll the clock back to 1964, and nationally, 30% of people rented their home from a private landlord – today – its only 15.3% nationally.

If you are an existing landlord or someone thinking of become a first-time landlord looking for advice and opinion and what (or what not to buy in Bexhill), one source of information is the Bexhill Property Blog at www.bexhillpropertyblog.com

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How The Rented Sector Has Transformed The Property Market In Bexhill

The Bexhill housing market has gone through a sea change in the past decades with the Buy-to-Let (BTL) sector evolving as a key trend, for both Bexhill tenants and Bexhill landlords.

A few weeks ago, the Government released a White Paper on housing. I have had a chance now to digest the report and wish to offer my thoughts on the topic. It was interesting that the private rental sector played a major part in the future plans for housing. This is especially important for our growing Bexhill population.

In 1981, the population of Rother stood at 76,500 and today it stands at 92,900

Currently, the private rented sector accounts for 17.3% of households in the town.  The Government want to assist people living in the houses and help the economy by encouraging the provision of quality homes, in a housing sector that has grown due to worldwide economic forces, pushing home ownership out of the reach of more and more people. Interestingly, when we look at the 1981 figures for home ownership, a different story is told.

71.8% Bexhill people owned their own home in 1981 whilst 16.13% Bexhill people rented from the Council or Housing Association in 1981 and 12.07% Bexhill rented from a Private Landlord               

The significance of a suitable housing policy is vital to ensure suitable economic activity and create a vibrant place people want to live in. With the population of Rother set to grow to 109,000 by 2037 – it is imperative that Rother District Council and Central Government all work actively together to ensure the residential property market doesn’t hold the area back, by encouraging the building and provision of quality homes for its inhabitants.

One idea the Government has proclaimed is a variety of measures aimed at encouraging the Build-to-Rent (BTR) sector (instead of the BTL sector). These include allowing local authorities to proactively plan for BTR schemes, and making it simpler for BTR developers to offer inexpensive private rented homes.

To do this, the government will invent a distinct affordable housing class for BTR, called ‘Affordable Private Rent’, which will oblige new homes builders to provide at least 1 in 5 of a new home developments at a 20% discount on open-market rents and three year tenancies for tenants. In return, the new homebuilders will get better planning assurances.

Private landlords will not be expected to offer discounts, nor offer 3-year tenancies – but it is something Bexhill landlords need to be aware of as there will be greater competition for tenants.

Over the last ten years, home ownership has not been a primary goal for young adults as the world has changed. These youngsters expect ‘on demand’ services from click and collect, Amazon, dating apps and TV with the likes of Netflix. Many Bexhill youngsters see that renting more than meets their accommodation needs, as it combines the freedom from a lifetime of property maintenance and financial obligations, making it an attractive lifestyle option.

Private rented housing in Bexhill and Rother, be it BTL or BTR, has the prospective to play a very positive role.

Old Town image courtesy of Sharon Webster

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