While millennials and Gen-Z struggle with rising rents or – if they’re lucky – mortgage rates, new data reveals that older Londoners are living in homes with surplus space.
A recent survey by Zoopla found that 32 per cent of over-65s in the capital admitted to living in a house that’s "bigger than they need".
On average, they live in a three-bedroom home and have 1.3 spare bedrooms each – something their children and grandchildren can only dream of.
While space in the city comes at a premium, almost four in ten Londoners (38 per cent) have two or more spare bedrooms and eight per cent use none of their spare bedrooms on an annual basis.
With just about every household bill on the rise, having a larger home than you need is a significant financial commitment. On average, those who own a home that’s too big spend an extra £91 a month and 12.6 hours additional hours in maintaining it, when compared to a suitably sized property.
Many older Londoners have a significant amount of equity in their home as the survey found that on average they’ve owned their properties for 27 years, during which time prices have sky-rocketed.
Indeed, a separate study this week showed the number of London homes now owned without a mortgage rose by almost a third in the past decade.
Why aren't people downsizing?
When questioned by Zoopla about why they hadn’t downsized, 40 per cent of the 2,000 respondents said that they’d never considered it, 14 per cent had considered it but decided not to, 10 per cent had downsized but to a home that was still bigger than they needed and 27 per cent were currently considering downsizing.
Christmas was a major factor; 27 per cent of those with a larger home than needed highlighted that they’d be ‘concerned they wouldn't be able to host Christmas’. That said, only 57 per cent used all their rooms even when they did host Christmas and only a third hosted Christmas every year.
Among the other reasons for not downsizing were that selling and buying a house is too stressful; they wanted to keep it for their family to inherit; they had emotional ties to the property and that it was still the ‘family home’.
Creating a domino effect of short supply
Zoopla says that older homeowners staying in their homes is creating a domino effect of short supply when it comes to three-bedroom, family-sized homes.
"Not only does this impact second-steppers, but also first-time buyers (who make up 34 per cent of the market). This is because the age Brits are buying their first home is increasing; the average first time buyer is now 34, compared to 30 a decade ago, meaning many need a family-sized home from the get-go.
"Our research found that three-bed homes, the most in demand property type in the UK, are often the ones that are held on to by homeowners, for a variety of reasons. This is having a knock-on effect on other sections of the market," said Daniel Copley, consumer expert at Zoopla.
What is the solution?
Encouraging people to downsize has long been an area for debate and it’s been mooted that stamp duty incentives might persuade people to buy somewhere smaller.
"Removing SDLT for those downsizing has been shown to work as an incentive when offered by retirement developers, however, only five per cent of those moving in later life move into a retirement complex or any form of assisted living," said Susan Gregory, founder of Turners Oak, an estate agents for older home owners.
"Removing the SDLT for all of those moving in later life could encourage the majority who are moving into mainstream housing to take that next step."
However, the survey reveals that people’s reasons for not downsizing are often not financial, but are tied up with their own psychology and the emotional feelings they have towards their home. Perhaps a solution is giving them better alternatives.
"Less a policy, and more of a lifestyle option are the new developments and retirement villages which encourage luxury, future-proofed living. The accommodation has space to breathe, exercise, privacy, a sense of community and, as care needs increase, trusted support," said interiors therapist Suzanne Roynon.
"It might not be the first downsize step, but actively promoting the creation of enjoyable living spaces for more mature couples and individuals may be the motivation required to release a wealth of substantial properties into the housing market."
With an ageing population in the UK, creating homes that are attractive to this demographic makes financial sense.
"It would be great to see policies that encourage and even regulate for a percentage of all new developments to specifically be catering for older movers and ringfenced for them," said Gregory.
"We have 5.4m homeowners +65 years old in England and this is projected to grow by 47 per cent in the next 20 years. We need to be building suitable, aspirational properties with a range of tenures that allow people to age in place."
