As house prices continue to rise, you might expect that a growing number of older homeowners are looking to downsize their home and cash in some of the capital. But according to new research many are put off by the lack of housing options for older people and the difficulties of moving.
Almost three-quarters of enquirers aged 55-79 contacting www.downsizingdirect.com said they want help selling their home and buying/moving to a smaller property.
But 24% say they are put off downsizing by the lack of housing options, 19% by the hassle and cost of moving, 14% by having to declutter their possessions and 14% by family reasons such as staying close to children and grandchildren.
These barriers to downsizing may explain why in the UK it's estimated that only one in ten older people downsize while more do so in other countries. One in five pensioner households in the USA downsize, for example.
71% of enquirers to www.downsizingdirect.com said they wanted help selling their current home and buying/moving somewhere smaller. 15% said they wanted help to declutter while 14% were planning ahead.
Of the reasons given for wanting to downsize, 43% want to move to a smaller property; 38% give family reasons (such as death of a partner, moving closer to family); 33% say they have care, health or mobility needs; 24% want to reduce their running costs/maintenance bills because their property is too big; 19% want to release capital; and 10% are planning in advance of retirement.
www.downsizingdirect.com aims to encourage downsizing and provide advice and support to older people and their families to help them move to 'the right home at the right time'. With rising house prices the website estimates that older homeowners could release on average £100,000 capital and could save £2,000 a year by reducing their energy bills and other household running costs if they downsize their home.
More downsizing could also help tackle the housing crisis by enabling 'last-time buyers' to release thousands of family-sized homes.
Of owner occupied homes, 49% are 'under-occupied' (at least two bedrooms more than needed, according to the recently published English Housing Survey). 7.2 million of the 14.3 million homeowners own their home outright and 85% of these outright owners are aged 55 plus.
Recent research from Prudential shows that some 2.3 million households aged over 55 are planning to downsize. Older homeowners are likely to be thinking about downsizing, particularly while housing prices are rising.
But clearly some older people face barriers to downsizing. Government needs to encourage better alternatives to be developed for older homeowners, as can be seen elsewhere in Europe. Good advice and support for older people thinking about moving are also critical.
Housing developers should see this as a massive opportunity but at the moment it seems like a market failure. Older homeowners want more options to buy and move to - properties that are not just smaller and less expensive to maintain but also attractive and accessible at the heart of our communities.
Downsizing has multiple benefits for older homeowners and their families. It can liberate older people by freeing up cash in retirement and making their home easier to manage. In some cases it can help older people pay for care and get the support and company they need. Grandparents and great-grandparents can use the cash to help their younger relatives.
If we are to achieve these win-wins, then we need to help older homeowners downsize while they can make the most of the benefits.