New figures reveal large numbers living in homes too big for their needs
More than two thirds of home owners aged over 65 in England have at least two spare bedrooms, but only 2% expect to move in the next six months, the latest findings of the English Housing Survey shows.
Overall some nine million households in 2018/2019 were living in under-occupied homes, which are defined as properties with at least two spare bedrooms, according to the figures published by the Ministry of Housing, Communities and Local Government (MHCLG).
Home owners accounted for 7.9 million of these households, with over 54% living in under-occupied homes and under-occupation is highest among older age groups, with 67% of home owners aged 65 or over living in homes with at least two spare bedrooms. This is equivalent to 3.6 million households, but only 2% of people in this age group expect to move within the next six months.
For those older home owners who did express a desire to move, downsizing was the primary reason given.
David Burrowes, Chairman of the Equity Release Council, said that it is important that older home owners evaluate all options available to them to provide a more comfortable retirement. ‘For example, this includes accessing property wealth to help fund home improvements or adaptations and paying for care support at home, as well as boosting retirement incomes,’ he said.
‘With the UK’s ageing population, falling pensioner incomes and mounting care costs, we are seeing a mind-set shift in the way that older homeowners view property wealth in later life. Our own research has found that 64% of home owners aged over 65 identify property as playing an important factor to their financial comfort in later life, with many planning to use it to support themselves and younger generations,’ he explained.
‘To navigate the challenges facing older homeowners as they progress into and through retirement, the incoming Government should act to establish a cross-party Later Life Commission and a dedicated Minister for the Elderly. There is also a responsibility on industry and regulators to step up efforts on financial education and product developments,’ he added.
The figures show that once people have bought a family home, they tend to stay put even many years after their children have left, according to Just Group communications director Stephen Lowe.
‘There are many reasons for this such as they like the neighbourhood, the extra space to entertain family or friends, the happy memories, and perhaps they see it as a continuing good investment. But it does raise a bigger question about how easy or costly it is to downsize and whether there should be more incentives to move to free up space,’ he said.
‘While we are emotionally invested in our homes, we are also financially invested and for those who are happy staying put, but find their finances become more stretched through retirement it is likely equity release will become a bigger part of their financially planning,’ he added.
Chris Sykes, Private Finance mortgage consultant, believes that the cost of stamp duty is discouraging people from downsizing, leaving them in homes too large for their future needs, but too costly to give up.
‘As a result of this inactivity at the top end of the ladder, housing stock is limited and the UK property market is somewhat paralysed. To free up housing stock and re-energise the property market, we are calling on the UK Government to introduce a stamp duty exemption for last time buyers,’ he said.
‘Minimising the tax liabilities for older generations could encourage and enable them to finally downsize, freeing up housing stock and thereby helping to fix the supply issue that has hindered the market for so long,’ he added.