Scottish Daily Mail
Last-time buyers hold key
THE difficulties faced by the priced- out generation of first time buyers are well-aired, and rightly so, but helping last time buyers is one of the things that need to be done to correct the dysfunctions of the housing market.
There is no doubt that life has become much, much more difficult for young people taking their first steps onto the property ladder as prices have shot up through a combination of cheap money, overseas buyers and the British obsession with owner-occupation.
When my parents bought a Wimpey bungalow in 1969, the price of a starter home was just over £4,000.
It has risen around 48 times since then, to a typical price of just under £200,000.
This hugely outstrips the growth in first-time buyer incomes, which have risen 29 times from £1,600 to £47,574, according to Shelter.
In London, matters are even more extreme.
My first property in the capital was purchased in the 1990s at a multiple of 2.5 times salary.
That apartment has risen in value tenfold, putting it well out of reach of young jobbing journal- ists and into trust fund territory. The fact that David Cameron’s plans to build starter homes with discounts for first time buyers up to the (middle) age of 40 tells its own story: in previous generations, a 40-something taking their first step into ownership would have been a rare bird.
Pensions freedom day in April may deal yet another blow to first-timers, as hordes of older people are expected to invest their newly-liberated retirement money in buy-to-let property, crowding out their children and grandchildren.
Blaming older people is futile, however, particularly since there are plenty of problems at the other end of the age spectrum.
Supply shortage is routinely cited as one of the major factors behind the property crisis, but what is often ignored is the fact that the UK is specifically failing to build retirement homes.
The nation’s housing stock does not reflect the ageing population: with the number of over-65s set to grow to more than 17m by 2033, from 11.4m last year, we need properties suitable for ageing single people and couples in towns and cities as well as family houses built on green belt land. Millions of older people are potentially i n the market for down- sizing and moving into a retirement home, but are unable to do so because there are only around 110,000 retirement properties in the UK available to buy.
Building more retirement homes would help release properties onto the market for younger families, reducing the need for new build. There are several measures other that could help get the lastt i me buyer market moving, including a requirement on local authorities to have specific housing policies for older people.
Initiatives to improve standards across the leasehold property industry – not just retirement homes – are also essential, as many fear being fleeced through excessive charges and poor service.
There is also a case for exempting older people from stamp duty on the purchase of a retirement home as an added incentive.
Older people are sometimes criticised for continuing to live in homes that have become far too big for them, and contributing to the housing logjam, but for many there is no decent alternative. It makes sense to offer one.
ALL the main political parties are now converted to the cause of manufacturing.
The bad old days, when even the boss of a chemicals giant like Ineos struggled to get an audience with the then government business supremo Peter Mandelson are gone.
The upcoming Budget is likely to contain measures to help the country’s 9,000 or so mid- sized businesses, many of them in manufacturing, as the CBI and the government’s trade supremo Lord Livingston are advocating.
The hope is for the UK to build an equivalent of Germany’s Mittelstand of medium-sized manufacturing export companies
There is a lot of ground to make up, however.
At the moment, UK manufacturing success stories, such as the car industry, actually involve lots of components made abroad – if we want to be more than just an assembly point we need the fully supply chain.
Operators here also spend much more on energy costs than their competitors overseas, an issue that has been swept under the carpet by politicians.
So how are we doing versus Ger- many? Well, two decades ago, German and British manufacturing each accounted for around 23pc of the respective economies.
The proportion is the same in Germany but here has dwindled to 11pc.
Some of that is due to the growth in this country of the financial services ‘industry’ in Britain. Even so, those are frightening figures.
AMAZON has suffered a blow over the marketing of its ‘Prime’ service, highlighted in this column last month.
The Advertising Standards Authority ruled that a mailshot containing a card offering a ‘free trial’ for Prime did not make it clear enough that a subscription costing £79 a year would be triggered automatically if customers did not cancel during the 30 day grace period.
The online shopping giant claimed it had spelled out that the free trial would convert to a paid subscription, and that this was common practice.
The latter is true, but so what, it’s still sneaky, and the amount of the subscription fee was material information that should have been included.
Credit to the ASA for administering a well-deserved rap on the knuckles to arrogant Amazon.