Is It The Right Size?
Is it the right size?
Over-60s are being blamed for a lot at the moment: lack of jobs, the NHS crisis, and the high cost of housing. Surely it can’t all be our fault?! Take the housing crisis. The fact that young people are struggling to get on the property ladder isn’t due to the buy-to-let market, overseas buyers seeing British property as a safe investment, or a lack of building. No, apparently it’s down to us.
‘Baby boomers are hoarding big homes at the expense of the young’ and ‘Should older people downsize to help the housing crisis?’ are two recent headlines castigating empty-nesters who refuse to sell up so a nice young couple can move in. But is it really true? And is it helpful to set one generation against another? To find out, McCarthy Stone commissioned a report, Generation Stuck: Exploring the Reality of Downsizing in Later Life. The findings were surprising. Contrary to the myth of people ‘hoarding’ their family homes, the research found that one in three homeowners aged 55+ are considering, or expect to consider, downsizing.
The biggest benefit they saw was freeing themselves from the financial burden of maintaining a large property. A second factor was unlocking the capital tied up in the property – downsizers release an average of £60,000 (based on purchasers of McCarthy Stone properties). Typically, this money will be put towards a pension or savings. There are two other benefits that only become evident once the move is made. Nearly two-thirds of people who moved into specialist retirement housing say their wellbeing has improved as a result. They also tend to be less lonely than those living in other general housing. So if it’s all so wonderful, why don’t more people do it? One of the biggest obstacles is finding somewhere suitable to move to. While the government focuses on boosting supply for first-time buyers, it’s ignoring the other end of the market – which is short-sighted when 60 per cent of growth in households over the next 20 years will be in the over-65s. Additional factors are the nuisance and cost of moving, as well as attachment to the family home, wanting the extra space for hobbies or visitors, and feeling that downsizing means going down in the world. (We say it should be called rightsizing instead!)
Fortunately, policy makers are starting to consider this end of the housing market – not to pressure people to sell up, but to provide options for those who want to do so. This means looking at the following:
- Changes to planning laws and incentives for builders to cater for the older market.
- Exempting older households from stamp duty when downsizing.
- Support for ‘later-life buyers’ who face an affordability gap with a Help to Buy scheme or contributions to moving expenses.
- Raising awareness of the potential benefits of moving, rather than the distorted view that older people are the cause of housing problems for younger generations.
Did you know
- £60,000 is the average amount released by downsizing.
- 64% say wellbeing improved after downsizing.
The report Generation Struck: Exploring the Reality of Downsizing in Later Life was compiled by independent think tank the International Longevity Centre and funded by McCarthy Stone.