The generational effect of the lack of suitable homes for the elderly..I
n this week’s article on the Rochdale property market, we consider what effect the lack of bungalows and affordable accommodation is having on older homeowners in Rochdale. The knock-on effect on the housing ladder is where potential opportunities for savvy property investors and potential developers are to be found, due to the imbalance of supply and demand.
The stats paint quite a picture.
66.4% of Over 65’s in Rochdale own their own home… The value of which equates to just over £1,008.4 million. A staggering value.
Of the 9,755 households in Rochdale where the head of the household is over 65 years of age, an astounding 6,481 of those are owned; a stat just below the national average of 74.1%.
On first look, those stats are quite positive. However, there is an overwhelming view on the ground in relation to the lack of suitable housing with many over 65’s looking to downsize. On average Bungalows in Rochdale achieve a 12% – 22% premium per square metre over properties with 2 floors, and 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.
In a survey conducted by YouGov, they established that just over one third of homeowners over the age of 65, were hoping to downsize. However, over the last decade, Government spending has focused on ‘Generation Rent’ and homes suitable for first time buyers, and as such the issue surrounding the under supply of suitable retirement housing essential to the needs across the UK, has gone unaddressed.
What does this mean for an increasingly ageing population in places like Rochdale?
Essentially the British housing market is unprepared for this shift to ‘overextended middle age’, creating what we’re calling ‘Generation Confined’. The quandary is such that the older generation in 3- or 4-bedrooms houses, are unable to downsize due to lack of suitable housing or smaller residences. Retirees living in the limited number of Bungalows in the area who are finding it difficult to live on their own, are unable to leave because of the lack of sheltered housing or affordable care homes. As such growing families are unable to move into larger properties – it’s almost as though everyone is waiting for someone else because of the bottleneck created by the situation.
Property prices across the UK including Rochdale have soared over the last 50 years, with new builds unable to keep up with the demand. With restrictive planning regulations, migration, extended life expectancy and increased in divorce rates, on average the requirement is around 240,000 new homes a year just to stand still.
At the turn of the millennium, the country was constructing on average 180, 000 – 190,000 households a year. That figure dropped in the five years following the credit crunch to under 145,000 homes a year. In 2018, over 217,000 new homes were built however the negative impact of lack of adequate housing has had a snowball effect.
So, what’s the answer? Prices of land are stifling the property market as large building firms are more likely to focus on traditional houses and apartments, purely because there is more profit to be made from them. However, for savvy investors in the Rochdale market, bungalows could be a great investment, with raised potential rental returns.