Only 14% of over 55s homeowners plan on downsizing

Only 14 per cent of homeowners aged over 55 who are not yet retired plan on downsizing, new data suggests.

It is the latest evidence of the so-called ‘later-living logjam’ that is plaguing the housing market in Britain.

This is because reluctance to downsize affects the levels of supply in the property market, and prevents growing families from being able to find suitably sized homes to move into.

Indeed, experts said this later-living logjam has a ‘ripple effect’ across the board and hinders housing prospects further down the property ladder.

A new survey of 2,000 adults over the age of 55 looked at attitudes to downsizing their property

Steve Bangs, of Pegasus, said: ‘The downsizing dilemma is significant for the industry for two reasons – not only does it underline the lack of supply and need to build more homes fit for all, but it also underscores a huge concern with the overall health of the housing market.

‘If older homeowners remaining in larger family homes feel they can’t move, upsizing families will also find themselves at a loss. 

‘This will in turn have a ripple effect right across the board, slowing down transactions and hindering housing prospects for first-time buyers.’

The later-living provider surveyed more than 2,000 adults over the age of 55 and found that 50 per cent are planning on staying in their current family home after they retire.

This figure jumps to a significant 68 per cent of those aged 71 to 75 years old.

The survey went on to highlight some of the main barriers to downsizing. Some homeowners would be willing to move to a smaller home but the barriers to doing so prove too substantial to overcome.

For a total of 37 per cent of respondents, the hassle of moving is too much. And then there is the potential cost of stamp duty, which is a consideration for 35 per cent of people.

These were the biggest barriers to downsizing, followed by a lack of suitable housing, which was an issue for 26 per cent.

Tomer Aboody, of MT Finance, concurred that the high costs of moving, particular stamp duty was proving too big a hurdle for some potentail downsizers.

He said : ‘The high cost of stamp duty is one of the main reasons why older downsizers are not selling up and moving to smaller properties.

‘We have been calling for stamp duty reform for a while as this would encourage downsizers to sell and bank as much equity as possible to boost their savings and help cover rising costs.

‘At the same time, this would free up much-needed family homes for those trying to move up the ladder.

‘A smaller property would not only be more manageable for downsizers in terms of maintenance but also cheaper to run and heat.’

 Only 14 per cent of over 55s homeowners plan on moving to a smaller home when they retire

The Pegasus survey suggests that attitudes to downsizing are shifting, however, with those who are most inclined to downsize being younger – at 88 per cent for those aged between 55 and 65 years old.

This is compared with only 8 per cent of those aged between 66 and 75 years old.

To help ease the logjam, Pegasus is calling for more support for later-living developers through fast-tracked planning.

Other industry experts agreed that there is currently a lack of suitable housing for older people to move into and better planning laws could help improve access. 

Mr Bangs added: ‘England’s rigid planning system fails to provide a framework that enables and encourages the delivery of homes in the later living sector. 

‘This puts the UK decades behind countries like the US, with our nation’s perception of later living and the reality of age-specific housing completely mismatched.

‘The lack of supply of quality mid-sized and smaller homes combined with the lack of awareness of a step that exists before moving into a dedicated care-led facility keeps the sectors potential capped for consumers.’

The cost of stamp duty and the hassle of moving are some of the biggest barriers to downsizing

The latest research is backed by official Government statistics which show that of the people who moved home last year, only 3.4 per cent were aged over 65, compared with 42 per cent who were aged under 34. 

Speaking about the Pegasus research, North London estate agent Jeremy Leaf said: ‘I am not at all surprised that the figure is only 14 per cent, particularly as mid-fifties is relatively young to be thinking about downsizing.

‘Generally speaking, we find people think more about downsizing in their sixties and seventies rather than earlier, unless they have other health issues.

‘However, the earlier such decisions are made, the better. We find, on the ground, that people often leave it too long and then don’t have the energy or motivation to do it. 

‘The most successful moves are invariably those who plan ahead, particularly if their existing properties are not particularly suitable for later living, with lots of stairs etc.

‘The lack of suitable housing to move into is an issue. In planning terms, that could be improved with greater accessibility to retirement housing. People want to feel comfortable where they are and have accommodation that suits their later needs.’