Almost half of retired people in the UK who own a home are considering moving to a smaller property or would be encouraged to do so if they were offered lower stamp duty, new research has found.
A number of experts have suggested that pensioners who are downsizing should pay less property tax as this would encourage them to move to a smaller home and free up family sized properties for those who need them.
Now research shows that some 48% of pensioners, an estimated 5.7 million people, are interested in downsizing, a rise of 4% or 300,000 compared with a year ago and a figure that is projected to rise to more than 11 million by 2036.
The survey by retirement home builder McCarthy & Stone in conjunction with YouGov also show that 1.2 million extra adults aged 65 and over would be encouraged to move with a stamp duty exemption when downsizing to further stimulate activity in the housing market.
The report adds that such a downsizing boom would release homes with a combined value of some £720 billion and people expect to release £80,000 of equity on average when downsizing, equalling £450 billion.
‘The rise in the number of those who want to downsize is an inevitable consequence of the UK’s rapidly ageing population. Within the next 20 years, those aged 65 and over are expected to grow by almost 50%, which will expose the UK’s grossly inadequate level of suitable housing for older people if we maintain the current status quo,’ said Clive Fenton, chief executive officer of McCarthy & Stone.
‘With over 11 million people considering moving to a more suitable property by 2036, the Government needs to put specialist retirement housing and other forms of accommodation for older people higher up the agenda or we will simply lack the necessary infrastructure and support services, particularly from a health and social care perspective, to deal with such a huge demographic shift,’ he pointed out.
‘The Government’s Help to Buy scheme and other initiatives aimed at first time buyers have spurred market supply of homes at that end of the spectrum but has done nothing to help the housing choices of those in later life. We really need a strong planning policy presumption in favour of retirement housing and other forms of suitable housing for our ageing population,’ he added.
The firm believes that older people are discouraged by the lack of suitable housing and the cost. ‘A stamp duty exemption would make the process more attractive, and the figures show that over a million more older people would be encouraged to move as a result,’ Fenton explained.
‘Encouraging moves at the top end of the housing chain will stimulate activity, release millions of under occupied family sized homes onto local markets, and help younger people move up the ladder,’ he concluded.
