Young people are being forced into smaller rented homes because of the cost and again if they buy due to the high price of property in the UK, new research shows.
It means that young people aged 18 to 34 are four times more likely to downsize their homes than elderly people, according to the analysis by financial firm Hargreaves Lansdown.
The survey found that 12% of young people expect to move to smaller place while just 3% of those aged 55 an over intend to downsize this year. It says that the figures confirm how hard it is for young people to move up the housing ladder.
They also point to similar problems in the rental sector. Many under-35s looking to downsize are thought to be tenants in parts of Britain where rents are going up quickly. They are forced to move to smaller properties each year because their wages are not increasing at the same pace.
Other young downsizers may be first time buyers who cannot afford a mortgage on a home as big as the one they rent, the survey report points out, adding that many older people have paid off their mortgages, reducing pressure on them to move to a smaller house.
The report explains that pensioners may also be staying put because of the boom in equity release. The survey found that although few over-55s intend to downsize soon some 22% expect to do so at some point.
The place where most people are planning to downsize is Leeds with 16% saying they planned to switch to a smaller property within a year, followed by Edinburgh with 12% and Brighton at 10%. In contrast just 1% intend to do so in Southampton.
‘Generation Rent is being squeezed out of the property market and crammed into smaller and smaller homes. ‘Tenants may be forced to keep downsizing in order to keep a lid on costs. When they eventually buy, they may have to downsize again in some areas to get on to the property ladder,’ said Sarah Coles of Hargreaves Lansdown.
