Posted on 30.3.17
With the average price of a first home at an all-time high, combined with low wage inflation and rents amongst the priciest in Europe, The challenge facing first time buyers has been a heavily debated topic in the news throughout the past few years.
But those on the opposite end of the spectrum, the ‘last time buyers’, are rarely discussed and could hold the key to untying billions of pounds worth of housing stock.
Currently, 90% of 65-79 year old’s live in under occupied houses with 2 or more spare bedrooms, this means potential last time buyers are currently holding on to an estimated £820 billion of property wealth and over 7.7 million spare bedrooms.
More often than not these large properties become more unsuitable as time goes on, being more expensive to heat, time consuming to clean/maintain (large gardens for example) as well stairs becoming a potential issue at a later age.
With almost a third of homeowners aged over 55 claiming to want to downsize in the future, only 7 per cent have actually made the move, so what’s stopping them?
Barriers for last time buyers
The number of home-owners over 55 looking to downsize equates to roughly 25 times the amount of new houses built in a recent typical year.
This shows there is a fundamental under supply of age specific housing in the UK today, just 2% of homes in the UK are retirement properties, housing just 1% of the 14 million Britons aged 65 and over (compared with 17% in America).
But it’s not just a lack of adequate properties that is preventing last time buyers from making the move. Many home owners surveyed either didn’t want to give up their family home, were unwilling to move further away from family and friends, were put off by stamp duty and potential tax burdens or were simply just putting it off until a later date.
Reports show that this is causing the housing market to go stagnant, and if the issue isn’t addressed, the UK could face a retirement housing gap of 160,000 homes by 2030.
Benefits of downsizing
More affordable, purpose built property for the 55+ generation to downsize into will untie housing stock, which will help to alleviate the challenges facing first time buyers by freeing up more family sized homes and also allow last time buyers to move to a more suitable property.
Downsizing can also free up additional funds for retirement and ultimately provide a better quality of life for you and your family into old age.
If you are looking to downsize into a more suitable property, Gorvins can help.