It is a truth universally acknowledged that the United Kingdom is in desperate want of housing.
However, the type of housing required is a much more debatable point. Whilst the Government focuses on first time buyers with its Help to Buy scheme, many architects are far busier addressing the housing needs of the elderly. From state of the art retirement homes to assisted communities and independent living accommodation, there is somewhat of a boom in this growing market thanks to the aging population.
This is good news in relation to the ongoing threat of a housing bubble. There is a surprisingly large number of single pensioners bed-blocking family homes in the UK and one of the reasons is that they are unable to find suitable alternative housing.
Selling up and downsizing could create a much better standard of living for many elderly homeowners if better, specialised accommodation were available. This would free up more family homes for younger generations of buyers – something that the government is already trying to achieve in the social sector with the controversial bedroom tax policy.
The Royal Institute of British Architects has even suggested that we can go some way to addressing the problem of failing high-streets by using their empty buildings for the development of housing designed for the elderly.
It is a rather romantic concept. Central, accessible housing in the heart of the community for elderly homeowners who have been previously isolated in under-occupied homes that are expensive to heat and difficult to maintain. In turn, the neglected high-street benefits from the grey pound and mortgage free, cash rich consumers. More family homes are released into the market and everyone is a winner.
Clutching at straws? Maybe. Quite frankly, anything that helps to increase housing supply is worth celebrating. While we’re at it we also need to redevelop more of the UK’s derelict homes and find a way to stop developers from hogging land that should be used for new homes immediately.
With land prices soaring, it is understandable that they are in no rush to address a lack of supply which is pushing prices through the roof. It is also unsurprising that the preference is to build flats and apartments with such high rental yields on offer.
Nowhere is this situation more critical than in London and the south-east. The threat of a housing bubble seems almost laughable when you take those distortive figures out of the equation.
London has the added complication of a large number of rich cash buyers from foreign climbs. In prime areas around 60 per cent of purchases are made in cash. There is no requirement for an independent valuation in case the property is overpriced.
Nor do the buyers care about rental yields or the consequences of an interest rate rise. Gazumping in this market can mean colossal sums and this impacts the overall market.
The Government has hinted at capital gains tax for foreign buyers. This would bring us into line with most of the EU.
Dominik Lipnicki is director at Your Mortgage Decisions