25th January 2022
Barriers to access: £516bn in equity held up as downsizing remains unfeasible for almost 3 million retirees
- New research shows 35% (c.4.3 million1) older people would consider moving from their existing property
- 33% (c.4 million2) of older people think there should be more retirement housing available in the UK
- 24% (c.3 million3) of older people think they will need to downsize
- 23% (c.2.8 million4) of older people feel that a stamp duty exemption for downsizing would encourage them to move
New research by the UK’s leading developer and manager of retirement communities, McCarthy Stone, has found that over a third (35%) of older people, equating to an estimated 4.3 million, would consider moving, with nearly a quarter (24%) of retirees – c.3 million – potentially needing to downsize.
With the impact of the COVID-19 pandemic creating a strong desire to move home, McCarthy Stone’s research found that retirees felt there were too many barriers that disincentivised them to move.
The poll, conducted with YouGov, found that a lack of suitable housing options remained one of the primary barriers standing in the way of older people moving, with 33% of retirees, equating to an estimated 4 million older people, calling for the UK to prioritise the development of more retirement housing solutions. Almost a quarter (23%), suggested that a stamp duty exemption for downsizing would significantly encourage them to move.
Removing these barriers to access for the elderly could also have significant economic implications too. If those who were keen to move were able to do so, it could free up over £516bn5 in equity, with an average move freeing up c.£120k. Furthermore, 24% (c.3 million) would consider downsizing, equating to £352bn6 in tied up equity which could go towards health-related care costs while also directly releasing a number of properties back onto the housing market to help those further down the property ladder.
McCarthy Stone operates 475 retirement communities around the UK for an estimated 20,000 older people, and its Chief Executive, John Tonkiss, believes the issue can be addressed by a range of policy changes, including a stamp duty exemption for downsizers moving into a retirement community, the establishment of a Later Living Taskforce that looks at ways to build more suitable properties, and for the Government to work with Homes England, its housing delivery agency, to make 10% of their new housing designed specifically for older people.
Speaking on the results of the research, John Tonkiss said: “Over the last few years, we have seen growing narratives that older people are “refusing to downsize” and “clogging up the housing market”. However, as these results show, this completely misses the mark. The reality is that for many older people there is a genuine desire to move and downsize, yet little has been done to encourage them to do so. If we are serious about protecting the interests of our ageing population, then the Government must rethink its approach to retirement housing to ensure we can begin to deliver the necessary supply.”
There are nearly 12.5 million people aged 65 or over and this is expected to increase as the UK faces an increasingly ageing population. Currently, retirement housing makes up just 2% of the UK’s housing supply and just c.7,000 new properties are delivered a year7. This remains drastically short of demand which is estimated at 30,000 new properties a year.
John Tonkiss adds: “It is time to move away from these narratives that only serve to exacerbate intergenerational conflicts and instead understand that enabling downsizing is about more than just furthering the interests of older people. If we can finally address the provision of retirement housing, we can begin to free up the market for younger generations and address the housing crisis once and for all.”
Over the last 12 months, the business has called on the Government to establish a Later Living Taskforce to comprehensively explore how to address the historic undersupply of suitable retirement housing in the UK and develop solutions for the delivery of more and better housing options for our ageing population. Most recently, Chris Pincher MP, Minister of State for Housing at the Department for Levelling Up, Housing and Communities welcomed the industries calls the establishment of the Later Living Taskforce and it is hoped the Government will make an announcement shortly.
1 Calculation made by McCarthy Stone – according to ONS figures there are 12.3 million 65+ year olds in the UK population, 35% of this figure is 4.3million.
2 Calculation made by McCarthy Stone – according to ONS figures there are 12.3 million 65+ year olds in the UK population, 33% of this figure is 4 million.
3 Calculation made by McCarthy Stone – according to ONS figures there are 12.3 million 65+ year olds in the UK population, 24% of this figure is 2.95 million
4 Calculation made by McCarthy Stone – according to ONS figures there are 12.3 million 65+ year olds in the UK population, 23% of this figure is 2.8 million
5 Figure is based on mean equity (£119,604) retirees expect to release were they to sell their property, multiplied by the number of over 65s in the UK who would consider moving.
6 Figure is based on mean equity (£119,604) retirees expect to release were they to sell their property, multiplied by the number of over 65s in the UK who would consider downsizing
7 CSFI (June, 2020) ‘Too Little, Too Late? Housing for an ageing population’ - https://www.bayes.city.ac.uk/__data/assets/pdf_file/0008/541664/too-little-too-late-june-2020.pdf