Our era of austerity may not yet have hit many in their wallets but there are signs that it is forcing us to rethink some cosy assumptions which no longer apply.
For the housing market an obvious example is first time buyers. We tend to talk as if ‘the norm’ for being an FTB is, say, early- to mid-20s; the recent change whereby the average first timer is in his or her 30s is, we reassure ourselves, an exception.
But what if it is not? What if living with parents or in private or social rented accommodation becomes just what happens, ‘the norm’, in future? There has at least been some discussion about this amongst the property chatterati but so far very little attention has been given to the other end of the age scale.
So what will happen to the concept of ‘retirement housing’ in our more austere times?
A few recent announcements and statistics deserve restating:
• Labour’s plan was to raise the state pension age from 65 to 66 in 2024 (men) and 2026 (women) eventually rising to 68 by 2044. The coalition is reviewing this and many expect much shorter timescales;
• The coalition has announced it will scrap the default retirement age, removing employers' ability to retire staff when they reach 65;
• The proportion of UK residents aged 65 and over is projected to increase from 16% now to 23% by 2033;
• Currently there are about 3.2 people working for every person of pensionable age. This is forecast to drop to 2.8 working people per pensioner by 2033, taking into account the last government’s timetable for increasing the pension age;
• The number in England and Wales reaching the age of 100 is increasing 8% a year. By 2033 there will be 64,200 living centenarians – eight times the total of today.
So in an era when people in their 70s may routinely be working and where living to be 100 will no longer be a rarity, are we still likely to have the concept of ‘retirement communities’ which try to coax people to buy from the age of 55?
I suspect not.
The reality is that with an ageing population, 55 is no longer ‘old’ (and I’m not saying that because in my case it’s not so many years away). The niche developers of this sector may have to accept reality and shift to a genuinely older target market.
Indeed, there are some signs this is happening. An advertisement for one retirement development in a recent Bricks and Mortar quotes the ‘starting’ age as 60.
But a bigger problem for these developers is the concept of ‘lifetime homes’ and Part M of the building regs, which ensure modern homes in the mainstream market are flexible and accessible enough to accommodate older residents whose mobility and dexterity falls over the years.
If more mainstream homes are suitable for our growing elderly population, and if the elderly become so numerous that they start to dominate or at least be a major part of every mainstream community, then what is the point of the retirement development?
Like so many issues in our changing times, there are currently more questions than answers. But in our assessment of how the property landscape is altering, we should remember that changes affect the older community as well as the first time buyer.
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