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Asks Jones Lang LaSalle in response to recent market commentary
London, 14th June 2013 - Recent market comment suggests that a significant opportunity to bring family homes to the market exists through senior home owners downsizing, with anecdotal evidence indicating that up to 1 million family homes could be released onto the market after a recent study by Key Retirement Issues showed that 1 in 5 over 55s is planning to downsize over the next five years.
Although, whilst assisting senior home owners through the process of downsizing has been suggested as the key to unlocking this under-used stock, Jones Lang LaSalle believes there are not sufficient suitable properties due to the overall housing shortage.
According to NHBC, only 2% of new homes registered in 2012 were bungalows, while 32% were flats and maisonettes. Detached, semi-detached and terrace houses made up 23%, 20% and 23% respectively. This has been a long term trend. In the 10 years to 2012, the average is 2% for bungalows and 41% for flats and maisonettes. The average for detached, semi-detached and terrace houses is 20%, 16% and 20% respectively. Looking at the past five years, this translates into an average of only 2,100 bungalows being built annually, while according to the 2011 census, approximately 600,000 people will reach retirement age each year for the next five years.
Jones Lang LaSalle believes that in order to address the problem the government needs to focus on the issues at the other end of the market, not just those of First Time Buyer’s. Whilst the majority of new stock coming to the market appeals to those at the first stages of home ownership, there is a drastic shortage of properties that are suitable for those further along the home ownership cycle.
Adam Challis, Head of residential research at Jones Lang LaSalle pointed out: “The government’s current housing initiatives, while helpful may focus too heavily on first time buyers. Other areas of the housing market may offer opportunities to release stock offering greater flexibility in the market. Through identifying and addressing shortages at other stages of the housing cycle, homeowners would be able to progress through the cycle more effectively and current stock could be utilised more efficiently.”
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