Under the headline ‘The Big Split in Britain’s Housing Wealth’, the Financial Times questioned the total value of all UK homes and said estimates could vary by the individual trillion, or so, depending on who is doing the calculations, but the summer property portal Zubla I put the figure at 10 trillion pounds ($11.6 trillion) at a time when analysts and property experts are wondering about the coming changes in the housing sector and will the rising cost of living change the ownership of new housing in the country?
In this regard, housing market analyst and founder of “Built Plus” consulting firm Neil Hudson told the newspaper that thanks to high interest rates and the worsening cost of living crisis, this will become a record number, at least when adjusted for inflation, adding, ” Forget the latest headline numbers that assume all homes are finding buyers at current prices in a very illiquid market, the most telling is that housing wealth is not evenly distributed.” Hudson notes that using English-language Housing Survey data that assumes a much lower lump sum and removes all outstanding mortgages, homeowners over the age of 65 collectively own 47 percent of total home equity, while those under the age of 65 Over the age of 45 only 12 percent owned.
He says property wealth may be one of the most striking intergenerational inequalities in housing, but it is not the only one. Residential space has emerged since the outbreak of the pandemic. He points out that on an aggregate level there are enough bedrooms for every resident of England to have their own with almost 10 million additional homes, and that’s before we include 1.1 million empty homes.
Hudson says most of these extra bedrooms are in homes occupied by older families (over 65 with 7.4 million rooms), while many children’s bedrooms will be empty for those who have left their family homes, although their rooms in some cases can be converted to Home. offices or another use that appeals to those of retirement age. “Maybe there are more gyms these days than the model railway,” he adds sarcastically.
The housing market analyst notes that he often suggests that all these extra bedrooms could be used to alleviate the housing crisis, so the country would certainly benefit from a more liquid housing market with better distributed homes, but he sees this as a moral and political difficult challenge, which demands to be solved. , saying he understands that older people are less willing and less likely to move to another home than younger cohorts.
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Hudson notes that older homes in Britain are not only associated with lower energy efficiency, but also older homes. About 48 percent of those with residents aged 16-29 had an energy efficiency score of (D) or lower, and for those over 65 this rose to 62 percent, with low-income households and younger families the most vulnerable could be in for a Cost of Living crisis given the budget’s ability to cut back on essentials, and older families are far from immune given the poor energy efficiency of their homes.
He adds that while energy price rises will be frozen this autumn, those living in homes with the worst energy efficiency rates will still have to pay more. Next month, the average monthly gas bill in homes rated (D) Energy Performance Certificate (EPC), a measure of energy efficiency in an individual’s residence, will be 28 percent more expensive than the average home rated (C) as an indication of improved energy efficiency in the home, according to an analysis by the Resolution Foundation. A beautiful home with original features and spare bedrooms can easily become a real burden for rich and poor retirees. It is unclear whether this is enough to trigger a flood of downsizing, but even if government support eases the pressure, the challenges facing families regardless of income, wealth or age could be significant enough to change people’s behaviour.
The challenges of modernizing energy efficiency
Hudson says that the investment required is one of the challenges to modernize and improve the energy efficiency of UK homes, and further analysis in the English Housing Survey shows that most (95 per cent) of D-rated homes in which older people live living can be upgraded to a D rating. C), but the average cost of improving their home according to this measure is estimated at £8,332 ($9,665), and this is just the average, meaning that 22 percent of households between £10,000 ($11,600 ) and £15,000 ($17,401) while another 12 percent will have to spend £15,000 ($17,401) or more, Khadson concludes by saying that given the costs involved, it may be time to sell some of that housing equity used older families were happy to include. Enough to round them up and reinvest in their homes.