Tuesday, 31 August 2010

The New Homeless

It is becoming increasingly apparent to me that we have a generation of new homeless people – young people in their 20s and 30s.

Actually, homeless may be too strong a word for them, and more appropriate is ‘houseless’.

This generation are either finding it very difficult to raise the funds to buy a property or have seen the down side of taking large loans and do not wish to get a foot on the property ladder. They even have their own term – KIPPERS, or Kids in parents’ pockets.

"KIPPERS" - it doesn't just refer to a fish

I seem to come across an increasing number of young people who in this situation, still living at home with their parents and desperate to move into a place of their own. Many of these young people have not saved money because this has not been something that they felt they needed to do in the times of excess. Now they need deposits of 20-25% to get a mortgage and their ability to raise this level of cash is difficult.

At _space group we have quite a few of our team within this age bracket and I am aware of a significant number of our people who are still at home with their parents, some in relationships finding it difficult to build a future together. There are even some who are starting families and still remain in separate properties.

The "KIPPERS" are ready to leave home, but can't get on the property market

Because of the need for such a large deposit, the private rental market has become attractive to a lot of KIPPERS, even though the products on the market are not great. At one end you have low quality, bedsit-type accommodation, and at the other, expensive riverside apartments. It is the more pragmatic accommodation in the middle which we seem to be without.

I know some RSLs have identified this and are trying to feed the market, but they themselves are suffering from funding challenges. I know recently of an RSL that put such properties on the market and there were huge waiting lists from people wanting the opportunity to rent, so it is clear that the demand is out there.

At _space group, we have developed a low cost house for the social housing market within our _spacehus brand. This is within the affordable window and also has minimal running costs. We have achieved this through offsite manufacture, which has allowed us to give each hus the highest quality in airtightness and insulation.

We are currently working on producing a £99,000 house, with running costs of £10 per week. While our buildings have low energy credentials, there is something else driving the project that we think is very important – by keeping the running costs low, the money the homeowner saves can be put towards paying the mortgage.

Our plan on the £99,000 house is to work on a 15% deposit with an 85% mortgage.

We are hoping to find a funder who will work with us who will help a whole generation own a home.

These £99,000 houses would even be appropriate for market rent if we can buy land at a realistic price. In the meantime, watch this _space!