Much of the debate around the housing crisis focuses exclusively on First Time Buyers and the challenges of getting on the property ladder. Little attention has been paid to Last Time Buyers - older homeowners living in properties that are now too large for them – who would like to downsize
Homeowners over the age of 50 hold 75% of Britain’s housing wealth, according to research from Savills. The Institute for Fiscal Studies has illustrated that young middle-class professionals today are half as likely to get on the housing ladder as they were 20 years ago – just one in four young middle-income families own their own home (down from two in three in the 1990s).
There are now 3.1 million households who are aged 55 and over looking to downsize in the future, according to research by Legal & General and The Centre for Economics and Business Research (Cebr). The UK’s ageing population means this issue is forecast to get worse, not better - by 2021 there will be 3.4 million Last Time Buyer households with a housing stock value of £1.2 trillion.
So, what’s stopping Last Time Buyers from downsizing?
Older people find themselves stuck in homes that are unsuitable for their changing needs and unable to enjoy the wealth locked up in them. This despite the fact they are open to downsizing, and to doing so at a younger age. The Legal & General
Last Time Buyer Report 2018 cites the optimal age to downsize is considered to be 65-69. This is down from 70+ when the same question was asked in 2015.
According to the Report, freeing-up this housing stock, it would make a huge contribution to easing the housing crisis, releasing family-appropriate properties close to schools, balancing intergenerational inequality and boosting the UK economy. Last Time Buyers can experience health, financial and social benefits in safer, more appropriate accommodation with reduced running costs.
While much of the downsizing debate tends to focus on costs (and these are an issue) the lack of good quality later living housing is the fundamental barrier to Last Time Buyers making the decision to move. This is an issue that can and must be addressed. Increasing the UK’s stock of dedicated later living housing supply is a smart way to unlock the Last Time Buyer market, help solve the housing crisis, and play a significant role in reducing the escalating NHS health and care costs for the elderly.
Drivers for downsizing
We need to do more to help our Last Time Buyers find a property that suits their needs and lifestyle aspirations. Legal & General wants to ensure that this key demographic has a choice; whether it’s the opportunity to move to the right type of housing across a range of tenures, or to help unlock their housing equity through a lifetime mortgage.
One thing that hasn’t changed is the type of property that Last Time Buyers dream of – for most it’s a two bedroom home near to family and friends, with more than one in 10 (13%) keen to move to dedicated retirement housing or a retirement village.
Read the Legal & General Last Time Buyers Report 2018.
