Is the prop­erty lad­der now just a myth?

The Guardian - G2 - - News -

Es­tate agents are sure to em­pha­sise a prop­erty’s suit­abil­ity for a cer­tain cus­tomer: “the per­fect starter flat”; “lovely fam­ily home”; “suit­able for some­one look­ing to down­size”. But is the prop­erty “lad­der” – the idea that, in an av­er­age life­time, home­own­ers will own dif­fer­ent homes ac­cord­ing to their needs – a thing of the past?

In the­ory, a cou­ple own­ing a starter home and con­sid­er­ing chil-

dren would find they could af­ford to move to a big­ger – and most likely more ex­pen­sive prop­erty – be­cause their house­hold in­come would have in­creased through salary growth and ca­reer pro­gres­sion. But with house­hold in­come fall­ing at the fastest rate since 1976, wage stag­na­tion and the squeeze on the cost of liv­ing, the op­tion for many may be dwin­dling.

A so­lu­tion might be to re­mort­gage to a longer term to bring monthly re­pay­ments for a pricier prop­erty down, but with the av­er­age age of a first-time buyer at 32, this would mean mak­ing re­pay­ments well into re­tire­ment.

That’s a trend that is grow­ing – nearly four in 10 peo­ple who were plan­ning to re­tire last year owed money on prop­erty – and many will use e pen­sion n pay­outs s to man­age e the debt. But ut with 44% 4% of millennials hav­ing aving no pen­sion sion pro­vi­sion, that hat win­dow w of op­por­tu­nity may also be clos­ing.

And even those mov­ing g “down” the lad­der may strug­gle, par­tic­u­larly pen­sion­ers look­ing to down­size their home. Re­search sug­gests that nearly half of over-65s want to live in a smaller sm prop­erty, er but can’t due to a lack of suit­able h hous­ing stock. This all m might ex­plain th the home­owner trend to “im­prove no not move” – in every re­gion of the UK ( bar Scot­land), plan­ning ap­pli­ca­tions h have gone up.

Per Per­haps it’s time to re­think the term “prop­erty lad­der” be­cause if you’re for­tu­nate eno enough to own your own ho home, you’re prob­a­bly stay­ing put. Coco Khan

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.