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Last Time Buyers - the problem we’re not talking about!
Over recent years, I’ve become very aware that it’s been hard for first time buyers. House prices have remained high; relative to incomes right through the recession, despite a drop in 2008-9. The challenge of finding a deposit, especially when the mortgage industry was taking fright at the height of the financial crisis, was nigh on impossible unless you had parents that were both well-heeled and incredibly generous. It’s still hard, which is why the Government’s Help to Buy scheme is still running and why we have continued to find that our innovative products designed to help first time buyers are still quite popular.
It’s perfectly reasonable that lenders, not to mention house builders, housing associations, Government, Uncle Tom Cobbly and all, have all been focussed on trying to help first time buyers. They are the lifeblood of the housing market!
But personal circumstances , and chatting to a lot of people who like me are of “ a certain age” has made me realise that housing provision for “last time buyers”; people in older life needing to adjust to getting older, is appalling too.
For some older people it’s straightforward enough. They simply down size when the kids have gone; take some cash out of the transaction and go and live in a more manageable bungalow by the sea.
Bish, bash, bosh.
But for many; particularly those getting quite a bit older, there are all sorts of problems which turn their once dream home into a bit of a nightmare. For many moving from a home that they’ve known and loved for years is a massive wrench. Then there’s the “stuff” collected over a lifetime. Most people I talk to tell me that you get to a stage where the thought of going through the stuff is just too emotionally painful or physically too big a task to contemplate. If you can get past those obstacles there then comes the question about finding suitable accommodation and I can assure you that is not a straightforward task. Most elderly people who have lived in a four or five bedroomed house don’t want to downsize to a small bungalow (where would they put all that stuff they’re not prepared to sort?!). If any borrowing is required, even if there’s plenty of income from a pension, now you really are into difficult territory….
So leaving’s worse than staying. But then you think about the maintenance… the garden needs digging, the windows need painting, the wiring needs sorting, the shower needs replacing. The list is endless.
Many elderly people become trapped in their own homes, where it’s too hard to live there and too hard to move. They are rattling around in houses that are totally unsuitable for them, know it full well, but can’t do anything about it. I’ve come to realise that it’s actually a chronic national problem, but nobody’s talking about it. Certainly not in the lending industry.
They’re too busy worrying about first time buyers!
We have been thinking much more about lending into retirement recently and lending to people once they have retired and what we might be able to do to serve elderly people better. I don’t suppose little old Bath Building Society is going to be able to do too much about this problem, on anything but a local scale, but if we can help even a small number of families wrestling with these dilemmas then that’s got to be a good thing.
Comment on this post
Posted by: Richard Furze on 20th May 2015
Hi Dick, I whole heartedly agree! Even when older people have been proactive and sorted out their accommodation requirements they are still at the mercy of private companies, just look at the closures old peoples homes or what is happening with Fitzroy House in Great Pulteney Street at the moment. Cruel and unfair when you have grafted your whole life. There is an opportunity here though, the current model of care homes isn't working or sustainable (there will always be a need for Nursing Homes) and there needs to be a drive to ensure where possible people stay in suitable accomodation with support provided in their home. There is a bit of a gap in financial planning here as well, as you mention in your article around borrowing. Often it can be the most financially stable time of life and with the new pensions liberation regulations kicking in last month maybe people will take some of the options to make financial decisions earlier on in retirement. Even with options on the table, which is the role of the financial services inurstry, the one thing you can't control is state of mind - if people believe they can't do anything - nothing will change for them! Richard