A new report “Generation Stuck” from the International Longevity Centre – UK looks at the benefits of and obstacles to older people downsizing to a smaller home. It is partly intended to counteract some reports suggesting older people are harming younger generations by selfishly “hoarding” housing. The title “Generation Stuck” refers to many older popele being essentially stuck in their present home because of various obstacles to downsizing which the report discusses.
While previous research has explored the extent to which older people live in under-occupied properties, this report informs the debate on downsizing in later life by providing new survey research on older homeowners’ actual experiences and expectations in this respect. Amongst the key findings are:
- One in three homeowners aged 55+ (32.6%) are considering or expect to consider downsizing. This figure rises to nearly one in two of all homeowners aged 55+ (48.2%) when factoring in those who have already downsized (15.6%). This is therefore an area worthy of greater policy focus, while the current policy debate is focused almost completely on first time buyers and starter homes.
- Lower maintenance was the most important reason people downsized or would consider it (56.0%).
- Close to a third (29.3%) of those who had downsized or are considering it did or expect to to release more than £100,000 in equity. Purchases from one specialist retirement housing provider, McCarthy & Stone, allowed its customers to release almost £60,000 on average from each move, with 19% releasing more than £100,000.2 Together, these figures show that releasing substantial equity can be a reality when downsizing.
- The most prevalent way that people did or will use the equity released from downsizing is to put it into a savings account (35.2% overall) or, for those aged 55-59, to put it towards a pension (34.0%).
- Specialist retirement housing could have a major impact on freeing up a larger housing market, with nearly 3.5 million older people interested in downsizing and buying a retirement property.
The report calls for a number of policy reforms to encourage downsizing and moving in later life, focused on the categories of adequacy, affordability and awareness, and contributes to the growing public debate on the state of the housing market in the UK.
You can download the full report from the ILC-UK website