Homeowners aged 55 and over are bucking the trend. Previous home buying behaviour for this demographic was a likelihood to downsize, once dependents have left home.
However, recent reports show that this age group is now less likely than ever before to move into a smaller home.
Those looking to downsize has reduced by nearly 200,000 in the last three years, a result largely due to the pandemic which has seen older people not considering downsizing as a priority for them. With Covid-19 impacting the mindset of many older homeowners, the market is now seeing empty nesters choosing to keeping proximity with nearby family and friends and staying within a familiar community. With numerous lockdowns endured, people have been forced to spend a lot more time in their homes which has clearly influenced many to stay put instead of downsizing.
Industry experts are indicating that this has had a direct effect on the housing supply problem, with higher demand vs less available properties for those wishing to move into a larger home. The study reveals that potential downsizers make up nearly a quarter (24%) of all households aged 55 and over. Their homes are likely larger family properties which have been in particular demand over the past 18 months, and if these homeowners were not choosing to remain in their homes, it could be freeing up a huge 2.9 million homes.
According to property portal Zoopla, the stock of such homes currently for sale is 26% down on the average level. And with demand outweighing supply house prices are seeing a steady increase in house prices; up 10.4% in the past year alone.
Although moving into a smaller property presents a way of releasing money from the home to enhance their pensions, findings report that over 55s would be more likely to use equity release on their current home – but use the extra money to buy another property. The survey also showed that over 50% of over-55s have no intention of leaving to go to a smaller property, which could perhaps be put down to a shift in emotional attachment to the family home or could indicate that currently the majority of pensioners are wealthy enough to not need to release money from their home.
The housing market is tough with these factors considered, however while many of the over 55’s have made their mind up not to sell, others impacted by the pandemic are open to reassessing their decision, in the near future. Research showed that nearly a quarter of over 55’s who haven’t sold their home said that they would still consider downsizing in time, but would assess their financial situation before deciding and or are unsure about the housing market currently.
