Our monthly residential market review provides background to recent developments in property markets, as well as to give an indication of how some key issues could impact in the future.
Whilst first-time buyers make up just over 50% of residential home purchases currently, a further 30% of purchases, accounting for approximately 200,000 homes, are being made by buyers aged 55 or older.
This research, conducted by the Intermediary Mortgage Lenders Association (IMLA), states that of this group, many are cash buyers, using the large equity reserve in previously owned properties to downsize to their ideal last home and retain the excess cash; 63% of these older homeowners own their properties outright.
The IMLA went on to add the caveat, that whilst only 2.5% of those eight million older homeowners actually move each year, it predicts that this small cohort will grow exponentially faster than any previous generations over the next 10-20 years.
The world’s financial watchdog, the International Monetary Fund (IMF), based in Washington and headed by the previous Finance Minister of France, and now Managing Director and Chairwoman, Christine Largarde, has fired a warning over the danger of overseas buyers disrupting domestic property markets.
The IMF has stated that house price booms are a consistent cause of recessions and countries, including the UK, should take note and make pre-emptive steps to ensure that this process does not repeat itself. In an effort to prevent a housing bubble destabilising the economy, the IMF suggest that Britain should contemplate imposing stricter mortgage limits and deterrents against overseas buyers of UK property.
They warned the UK is a market: “where foreign buyers have played a role.” The IMF also stated that: “The most recent data seem to point to an increase in downside risks to house prices over the next one to three years in some countries.“
In addition to adapting to trends in the property world, new housing developments are increasingly having to adapt to changes in wider society. These changes are having an impact on the communal amenities provided and outdoor space.
New home developments are now frequently design-driven by the demands of buyers looking for a ‘lifestyle’ that includes innovative amenities such as gyms and fitness centres, communal landscaped green spaces and community facilities, such as meeting rooms.
Given that many more people have flexible working patterns and may work from home, much more time is now spent by working families in the residential home and their desires are now being reflected in the initial overall design of mid and high end new-build developments.
Some new developments are offering innovative ‘extras’ such as individual indoor secure bicycle storage facilities, allowing homeowners to easily jump on their bike to commute to the station or office, or just to spend their leisure time cycling around the area.