Author Coco Khan
Read the Full article on the Guardian Website here.
The theory is that a couple owning a starter home and considering children could afford to move into a bigger property – but with household income falling, that idea is increasingly unrealistic
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 children 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 their pension payouts to manage the debt. But with 44% of millennials having no pension provision whatsoever, that window of opportunity may also be closing.
And even those moving “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 property, but can’t due to a lack of suitable housing stock.
This all might explain the homeowner trend to “improve not move” – in every region of the UK (bar Scotland), planning applications have gone up.
Perhaps it’s time to rethink the term “property ladder” – because if you’re fortunate enough to own your own home, you’re probably staying put.