There are millions of family homes in the UK that are under occupied and where the owners would like to downsize, according to new research.
In the so-called last timer buyer market, some 5.3 million properties are under occupied and of these 3.3 million would like to move, says the analysis released by Legal & General and the Centre for Economics and Business Research (Cebr).
These last time buyers are sitting on the equivalent of 2.6 million family homes, representing 10 years of housing supply based on Government targets or 20 years based on current housing completions, the report says.
As such, the LTB market owns 7.7 million spare bedrooms and a total of £820 billion of housing wealth, set to reach £1.2 trillion in 2020. Some 32% of these older home owners considered downsizing in the last five years but only 7% actually did.
The most common reason for considering downsizing by over 55s is that their property no longer meets their needs. Many older home owners allow inertia to keep them in their current home which is no longer fit for purpose and which is expensive to maintain. This is a particular issue for older home owners, many of whom don’t work, the report suggests.
Many of the over 55s and 63% of those with at least two spare bedrooms do intend to move, but all too often, they leave it late. More than half believe that it will be best to wait until they are over 70 before moving, and a quarter will wait until 80.
‘This is an overlooked sector of the residential market. Given its scale and the receptiveness of this demographic to the possibilities of downsizing, it presents a powerful tool for addressing the housing supply issues this country faces. By failing to target this key demographic with good value, purpose built housing for those aged 55 plus, Government and industry alike are missing an important trick,’ said Paul Stanworth, managing director of Legal & General Capital.
The report points out that the UK suffers from a chronic undersupply of age specific housing. Demos, among others, has noted that only 2% of the UK’s housing stock is retirement property, housing just 1% of the 14 million Britons in their 60s compared with around 17% living in retirement accommodation in the United States. All too often, this leads to older people living in homes that do not suit their needs, with moves often forced by circumstance rather than being a positive choice.
According to Bill Hughes, managing director of Real Assets at Legal & General Investment Management, bringing about multi-faceted financial and social benefits, the provision of safer, well designed accommodation that meets the needs of older people would not only ease pressures on the health and social care system, but free up savings locked up in housing for other uses, boost the UK economy and bring significant wellbeing outcomes for older people.
The research found that the critical barriers that older people identify are a lack of suitable accommodation, the cost of the available options and tax considerations. The research also sets out 10 steps to unblocking the LTB market which are aimed at boosting the supply and diversity of options available to older people.
They include the government focussing on this issue and committing to supporting an expanded provision of age specific housing to serve the needs of older people, while recognising that, when done well, retirement housing can connect residential infrastructure with the health and social care system, providing major benefits for both.
The majority of retirement housing is sold to occupiers on a leasehold basis but the report points out that an increased volumes of homes across all tenures, including freehold, shared equity and rented options, would allow the system to cater to a wider variety of needs and offer flexibility as people’s needs change in later life.