The UK’s grey explosion has definite implications for the UK’s future retirement properties, as well as the residential real estate market in general, a new report has claimed.  Retired people from the UK’s most rapidly-expanding demographic, as well as older households will, between now and the year 2026, come to stand for half of all household growth. The numbers come from the 2010 Retirement Housing Report delivered by UK properties consultants, Knight Frank.

The report has highlighted the importance of the need for the construction, development and care industries to become aware of this growing trend, and further pointed out that action in the UK retirement sector has historically been a long way behind thinking and practise in countries such as the US, Australia and New Zealand. Liam Bailey, the head of research at Knight Frank, stated that although retirement villages have long been popular in the UK, there are still few in the UK, which means that there are decent growth prospects for the concepts.

Mr Bailey also said that the growth in popularity of retirement villages ’stems, firstly, from the UK’s ageing population. Also, there is a growing tendency among older people to place an importance of the need for security, as well as opportunities to socialise.’ He also stated that the trend to release equity through downsizing may also result in a great move towards specialised retirement housing. In terms of statistics, the majority of over 65s in the UK (around 89%), live in mainstream housing. Compared to this, only 6% (around 500,000 households) are currently living in retirement housing with only 5% (perhaps 400,000) living in either residential care or nursing care.

Mr Bailey went on to explain that the majority of retired people live as owner occupiers in mainstream housing, whilst most people decide to take up places in retirement homes as a result of bereavement, poor health or the need to be close to family. He went on to identify the great opportunities in the retirement housing market for modern, purpose-built housing-particularly where the retirement village idea is concerned. Housing requirements will continue to grow due to the fact that people over the age of 60 are healthier, more active and are living longer than ever. Also, with many older people continuing to work, such new retirement villages must take such needs into account, as well as more advanced recreational facilities as older people demand more from their golden years. Such retirement villages also provide employment, which can also have a beneficial effect on nearby communities. They may also help stimulate further interest in buy-to-let housing specifically for this purpose and help encourage good mortgage rates on fixed-rate mortgages for key areas – all beneficial to the local economy as a whole.

The asking prices for homes in London UK has dropped in November. According to figures from Rightmove, house prices will continue to drop for a few more months as sellers are settling for lower figures so as to clear up their property before the New Year.

The latest figures showed that asking prices in London were down 3.1% to an average of £226,440. The only places that are currently seeing lower averages are Yorkshire and Humberside. "We expect three months of asking price falls before a tentative recovery in early Spring, likely followed by pre-election jitters." Said Miles Shipside, commercial director for Rightmove.

But not all figures are bad as 2009 has shown a temporary recovery with average asking prices up 1.6% then a year ago. Even with that, many lenders are worried about what 2010 will hold as the property markets have not completely recovered and home buyers are still scarce as many financial institutions have tightened up lending policies.

All in all, many analysts are expecting a “modest increase” in new mortgages coming 2010, but the increase cannot be determined yet and while it might happen, the increase is not big enough to pull the housing market out of the slump it is currently in.

There were two surveys recently that showed that house prices are on the fall. The two surveys were from the Royal Institution of Chartered Surveyors and PricewaterhouseCoopers.

Combined, the surveys show that house prices will continue to fall through 2009 and 2010. Although it is usually delay, the Government’s own house price survey showed a decline for the month of May.

PricewaterhouseCoopers in their survey showed that unemployment was one of the main reasons behind part of the fall. Homeowners are reducing the price of their homes that they have for sale for a quicker result on the market.

The report said, "Despite some recent reports of rises, we are not out of the woods yet and buyers should take a long-term rather than a short-term view." It warned that by 2020, even if there had been five years of strong growth, house prices could be lower, in real terms, than 2008 levels.

The monthly survey by the Department of Communities and Local Government (DCLG) showed that property values were continuing to fall, but at a slower rate than previously.

Average prices in the UK in May were 12.5% lower than in the same month a year earlier, with the average home costing 188,991-pounds.

Between April and May, prices dropped by 0.1%, primarily as a result of falling values for detached and semi-detached houses. This was partly offset by an increase in the average price of bungalows, terraced houses and flats.

The recession has a part to play in the dip in house costs as the general public doesn’t have the amount of spendable income it once had to make mortgage payments.

The National Housing Federation came out with new statistics this month that shows that in the future, housing prices will increase to new levels.

According to their research, you can expect them to fall by 4.6% by the end of this year, then you’ll see a rise in them in subsequent years.

Look for a 1.1% rise in 2011, 7.5% in 2012, 8.4% in 2013 and 6.8% in 2014.

The average price at then end of their forecast for 2009 will be 189-thousand pounds for a house in England.

In 2014, look for housing prices, on the average, 155.7-thousand pounds in the North East, 159.3 in the North West, Yorkshire and Humberside – 175.6. Further on, West Midlands 180.5-thousand pounds, London, 354.9, South East 293.6 and South West 225.4, all in thousands of pounds.

Federation Chief David Orr said, “Our new research shows that while house prices are falling in the short term, they will inevitably increase in the long term because of a fundamental under-supply of housing. Even though house prices are falling, and are set to remain sluggish in some areas for the foreseeable future, affordability is not improving for many low-to-middle income households. For millions of people who want a home, getting a mortgage can be like winning the lottery. First time buyers and those wanting to buy shared ownership properties remain victims of a deep freeze in mortgage lending.

He also said, “We welcome the Government’s recent promise of a national affordable house building drive, but if we are to avoid run-away house prices in the future when the economy picks up, ministers must ensure we build the right numbers of homes for social rent now, so that housing supply meets demand.”

Agency Express, in its latest Property Activity Index, for the month of July saw some surprising figures in some cities and disappointments in others.

Overall, the house sales showed a drop by some six-percent during the month of July even though there were signs that the numbers should have been better.

Cities that showed an increase in sales included Edinburgh up 36%, Leicester up 46% and the biggest shot in the arm came to York which showed almost a ninety-percent increase.

The cities that showed the biggest drop included Nottingham down 38%, Manchester down 44% and Glasgow which showed a surprising 74% drop in sales. One of the reasons that analysts think that the number of house sales decreased in these cities was the reluctance of some sellers to place their houses on the market during the summer season, generally a time when they go on holidays. They wait until the third quarter to place their homes up for sale.

Although it can’t account for the cities that showed an increase in sales, the summer sales season is somewhat slower than other and is consistent with what has happened in previous years. You can expect the market to pick up in August and September which would be more appropriate for the selling seasons of homes as it has been in the past.

Other areas that showed an upward trend in sales were Coventry and Carlisle while Bristol and Machester saw some declines over the three month period.

The price of a typical house rose for the third consecutive month in July, according to Nationwide, increasing by 1.3% on a seasonally adjusted basis. The 3 month on 3 month rate of change – generally indicated a smoother indicator of the near term trend which rose from 1.0% in June to 2.6% in July, the highest level since February 2007.

House prices are still 6.2% lower than 12 months ago, but this represents another sharp improvement from the 9.3% year-on-year decline in June.

Even if prices were to remain unchanged for the rest of 2009, the year-on-year rate would continue to improve since prices were falling very sharply in the second half of last year. For the first seven months of 2009 as a whole, prices have risen by a cumulative 1.3%, suggesting there is now a reasonable chance that prices could end the year slightly higher than where they started.

Although this outcome has come as a surprise, it is not inconsistent with other economic indicators and asset prices, which have also bounced back somewhat after very severe declines around the turn of the year.

During turbulent economic times, it is not unusual for economic indicators and asset prices to overshoot in one direction and then experience a correction in the other.

In the specific case of the housing market, the very sharp decline in transactions over the course of 2008 produced a fairly large pool of prospective purchasers who were ready and able to buy in principle, but did not want to do so in the very uncertain conditions prevailing when the banking crisis was at its peak last autumn.

The improvement in housing market conditions, however, does not mean that the positive price trends of recent months can be extrapolated into the future in a straight line. If prices continue to increase at the rate of the last three months, they would soon rise to levels that would be noticeably out of line with earnings, rents and other fundamental determinants of housing valuations.

One should also not underestimate the impact over time of high unemployment, which has implications both for buyer confidence and the financial pressure on existing owners to sell.

It is unlikely, therefore, that price increases can be sustained for long at the very strong rate observed over the last few months.

Positive signs have been showing when it comes to the mortgage and housing market. The Nationwide Building Society’s figures on the house price index shows that these prices have risen again and have done it again for the third time in June. Additional, according to the Bank of England, mortgage approvals have risen for five month in a row ending in June.

One of the problems, however, is that there seems to be a shortage in product choice at the moment. Tracker products have seen a reduction in over 80% during the past 12 month period. According to Moneysupermarket, wholesale borrowing costs have been lower with a 20-year low in the basic wholesale rate, the one that the Bank of England charges as it its base rate.

The mortgage expert at Moneysupermarket.com, Louise Cuming states, "The fall in the number of mortgages, highlights how the last 12 to 18 months have seen a complete meltdown in the market. Coupled with that, we’ve got mortgage rates that are completely divorced from the wholesale borrowing rate and to add insult to injury, mortgage rates are at their highest level for months. It’s a stark reminder that lenders call the tune and competition is no longer the name of the game."

Do you want a tracker rate right now? They’re not a bad shot as long as the base rate stays as low as it currently is, at 0.5%, but if that rate sees an increase anytime soon, you’ll likely want to make the changed to a fixed rate. Sure it may be higher, but the chances of fluctuation isn’t there to contend with.

Different lenders take alternative approaches when it comes to lending money for mortgages. First time buyers are usually the group that comes with some risk because they’ve never handled a mortgage out before. Moneysupermarket was quick to note that Abbey has a unique approach when it comes to handling this group of individuals.

According to Moneysupermarket’s Louise Cuming, the head of mortgages at the group had some unique comments about the way Abbey was handling mortgages with this group, Taking a more conservative approach to mortgages into retirement is a sensible move from Abbey, and one which we expect other providers to follow as lenders move to ensure the long term affordability of mortgage debts.”

She continued by saying, “Abbey has reduced the maximum age at the end of the mortgage term from 85 to 75 years, and borrowers should take this as a wake up call to make changes now to ensure their mortgage is repaid before retirement. This is increasingly important as a growing number of people are facing a significant drop in income with inadequate pension provisions.”

She added, “These days first-time buyers are older when they take out their first mortgage, with a typical first-time buyer being around 33. If they stay in the same house, they’ll have reached 58 by the time they finish their 25-year mortgage term. But if they move home a couple of times taking the mortgage back to a 25-year term each time, quite soon the end will be nearer 70.”

And made the final comment, “Homeowners should take advantage of current low mortgage rates and put some sorely needed extra equity into their homes and think about shortening the requested term if they can afford to. By reducing repayments from 25 to 20 years, homeowners could save £32,000 in interest and in addition it means borrowers are more likely to be able to clear their mortgage before retirement.”

The Land Registry compiles its information on a monthly basis to provide indicators as to how the housing market is moving. It often can be used to base mortgage rates by lenders that use this type of information.

Monthly figures for the time period ending in June 2009 showed that overall housing prices showed a small increase over the same period for the period ending in May. The increase was reported at 0.1% with an average cost of a home in England just roughly over 153-thousand pounds.

When comparing it to a 12-month average between 2008 and 2009, there was a different story to be told where housing prices dropped around 14%. The Registry states however, that it doesn’t signal a return to solid growth but rather a flattening process.

The five regions in the London area showed a 2% increase, while the East as near flat at 0.2%. The South East showed a growth of 0.3%, South West 0.4% and the West Midlands rose 0.5%.

Land Registry information also had some other breakdowns that showed modest decreases such as in Humber by 1.2%, Wales 1.1%, East Midlands 1.1%, the North West by 0.9% and only 0.1% in the North East.

The research also showed some other figures that were based on property types which also showed declines and they were “detached homes 12.2%; semi-detached homes 14.3%; terraced homes 14.6% and flats or maisonettes 14.8%.”

These numbers are somewhat representative of what some lenders are seeing in their research as well however there are some subtle differences. Additionally, these figures could be delay due to the nature in which they are compiled.

Zoopla Limited recently released some statistics on where some of the hotspots are for pricing of homes in England.

There were many locations that saw an upward trend in their figures while others didn’t fare as well. As a whole, however, prices in England did show a downward spiral that was approximately a little over 3-percent. This is when comparing prices for the last twelve months over the same period ending in 2008.

So far this year, the average cost of a home, country-wide, was approximately 207-thousand pounds and if you live in London, the price was higher, coming in 362-thousand pounds. Home values fell by roughly 11-percent in London when you compare them to the previous year.

Some of the areas that marked an upward trend included Oxfordshire, Bath, Plymouth, Wiltshire and North Somerset showed a gain of 1.4%.

There were areas such as Northumberland which showed a loss in price by nearly 10%, followed by Suffolk, Shropshire, Cheshire and Herfordshire.

There are many reasons for the drop in some of these areas that include unemployment, the recession and the variation in mortgage rates.

The Chief Executive of Zoopla, Alex Chesterman had a comment on these new statistics, “While optimism around a full market recovery may well be somewhat premature, there are clearly some bright spots emerging in the market and the overall pace of house price decline has slowed noticeably compared to last year which is good news for homeowners.”