85.7% of Wigston OAPs own their own home… and they are worth £758.3m

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Yes, that number is staggering, isn’t it?

Of the 4,474 households in Wigston where the head of the household is 65 years or older, an astounding 3,182 (or 85.7%) of those are owned, which is just above the national average of 74.1%, which sounds great – yet nothing could be further from the truth.

I chat with many Wigston pensioners who would like to move but cannot, as there is a scarcity of appropriate properties for mature people in Wigston to downsize to.  Due to their scarcity and the high demand, Wigston bungalows achieve a premium of, on average, 12% to 22% per square metre more than two-storey properties.  To add insult to injury, a recent NHBC report stated that only 1% of new builds in the country were single-storey bungalows (compared to 7% in the mid-1990s).

Wigston OAPs are sitting on £758.3m of equity in these Wigston homes

In a survey conducted a couple of years ago by YouGov, it was established that just over one-third of homeowners aged 65 and over in the UK were looking to downsize into a smaller home. Yet, the Tories, over the last nine years, have appeared to target all their attention on first-time buyers with stratagems such as Starter Homes to prevent youngsters of the UK becoming perpetual members of ‘Generation Rent’.   However, this doesn’t address the long-lasting under-supply of suitable retirement housing that is essential to meet the needs of the Wigston’s rapidly ageing population.  Lamentably, Wigston’s housing stock is tragically unprepared for this demographic shift to the ‘overextended middle age’, which has created a new ‘Generation Confined’ quandary where older people cannot move.

Also, those older Wigston retirees who do live in the limited number of Wigston bungalows are finding it difficult to live on their own, as they are unable to leave their bungalow because of a lack of sheltered housing and ‘affordable’ care home places

This means that older Wigston retirees can’t leave their Wigston bungalows, younger Wigston retirees in their larger two-storey family houses can’t buy those Wigston bungalows (occupied by the older retirees), and Wigston people in their 30s and 40s can’t buy the larger two-storey family houses (occupied by the younger retirees) they need for their growing families… It’s like everyone is waiting for everyone because of the bottleneck at the top.

For those wanting to see the complete stats for Wigston as whole:

 

Wigston OAPs by Tenure of their Home

Owned Shared Ownership Council Housing Private Rented Living Rent-Free
85.7% 0.6% 9.0% 3.2% 1.6%

Wigston’s (and the rest of the UK’s) property prices have soared over the last 50 years because the number of properties built has not kept up with demand.  With restrictive planning regulations, migration, people living longer and excessive divorce rates (meaning one family becomes two), as a country we have needed 240,000 properties to be built per year since the Millennium to just stand still.

At the turn of the Millennium, the UK was constructing on average 180,000-190,000 households a year, that figure dropped in the five years after the Credit Crunch to between 135,000- 145,000 households a year.  Although we built 217,000 last year, we still have those 19 years to make up for.

The answer? Allow more land for starter homes, bungalows and sheltered accommodation because land prices are stifling the property market as the large building firms are more likely to focus on traditional houses and apartments than bungalows (because they make more money from them).

My thoughts for the savvy Wigston property investors: until the government changes the planning rules and allows more land to be built on, bungalows – especially ones that need some TLC after someone has passed away – are a great bet for flipping and even potential rental returns for future property investment, as more and more OAPs will be renting in the decades to come.