Why over-55s are “trapped” in £820bn worth of outsized homes
Homeowners over the age of 55 are sitting on £820bn worth of "under-occupied" homes, new research has suggested – a figure which could hit £1.2 trillion by 2020.
The research, by the Centre for Economics and Business Research (CEBR) and institutional investor Legal & General (L&G), suggested so-called "last-time buyers" are struggling to maintain large homes which are "no longer fit for purpose".
According to the study, between them, the over-55s have 7.7m spare bedrooms, while 5.3m are living in under-occupied homes.
The typical last-time buyer is living in a four-bedroom house, but wishes to downsize to a two-bedroom property, while 32 per cent have considered downsizing in the last five years.
However, those whose family have flown the nest are allowing "inertia to keep them in their current home", the study suggested – with just seven per cent downsizing in the past five years, while 58 per cent put it off until they were over 70.
It's not just inertia, though – a "lack of suitable alternatives, high asking prices and the potential tax burden" has also put people off moving.
But L&G chief executive Nigel Wilson suggested persuading the over-55s to downsize could be the key to solving the housing crisis.
"To unlock the potential of the last-time buyers’ market, we need the right housing (two or three bedroom properties suitable for older people and near family, friends and facilities); the right tax regimes, with stamp duty a key focus; and better options to allow for equity release to harness the potential of this locked up housing wealth in cases where older people decide to stay where they are," he said.
"If we get those right, we can help older people in the UK move to properties which better fit their lifestyles and their needs, and, in doing so, free up valuable larger properties for growing families.”