Baby boomers the next help to buy?
The recently published Housing Market Intelligence report includes an intriguing bit of research from estate agent Savills and NHBC Foundation suggesting that the cash-rich baby boomers represent a significant opportunity not currently well served by the housebuilders.
With new housebuilding currently very much reliant upon Help to Buy – thankfully now extended to 2023 - the focus is naturally on the priorities of first-time buyers. Savill’s research suggests that, constrained by affordability, the millennial generation is focusing purely on the fundamentals: how much space can I buy for my budget?
Generation X – possibly second-time buyers with a growing family – will be looking for those fundamentals too, with an additional focus on car-parking and local schools.
Both of these age groups are well-served by large-scale developments marketing finished houses in phases. However, the baby boomers, who have generally accrued the most equity, have slightly different priorities.
Often looking to downsize and likely to be cash buyers they should be an attractive target for the housebuilders, but they are likely to be much more discerning – demanding quality and individuality both in design and performance.
This generation places much greater emphasis on quality in its broadest sense, including performance issues such as energy efficiency and the quality of interior finishes and fittings. This group is also most likely to want individuality – and to be prepared to wait longer to get a customised design that precisely meets their needs.
I may be going out on a limb here, but I would anticipate that the boom stimulated by Help to Buy will not last for ever and I wonder if it is time to concentrate on persuading baby-boomers to move into new homes that meet their priorities.
This could perhaps mean reserving a larger percentage of sites for house designs that are really flexible and allowing for customisation in terms of house design as well as interior fittings.
If the offer is well geared it may even help to alleviate the difficulty, as described in the Letwin report earlier this year, of completing sites within an economical time frame without exceeding local demand and impacting on price.
Other priorities for buyers of new-build homes identified by Savills and NHBC include minimal maintenance and comprehensive warranties – as well as the well-recognised value of location.
This is just one of the findings published in this year’s Housing Market Intelligence report, sponsored by H+H.