Once their offspring have left home, parents can often find the family house is too big for their needs and expensive to maintain. That’s why, as retirement approaches, many people think about downsizing, and moving to a smaller, easier-to-manage home that’s cheaper to run.
However, it seems that suitable properties might not be that easy to find due to a shortage of retirement homes. The think tank Demos2 has estimated that the UK has a shortfall of around 22,800 new retirement properties, homes that are needed just to meet current demand. With an ageing population, this figure is likely to rise steeply over the coming years.
HOUSING SUPPLY PROBLEMS
At least in part housing supply problems are caused by a lack of availability of the right type of property to suit retirees. They may like the idea of downsizing, but aren’t at the point where a retirement complex suits their needs or preference.
If older people can’t find suitable smaller properties to move into, then their larger family homes aren’t freed up to meet the demand from younger families looking for the extra space they need to grow. Current housing policy favours developers building starter properties, rather than also supporting older people to downsize. A shortage of smaller properties, in particular bungalows, means that prices continue to remain high.
The research shows that around three million people aged over 60 would be interested in purchasing retirement properties. At present, many new housing developments are concentrated on providing 3, 4 and 5-bedroom homes, and in some parts of the country there are double the number of 4-bedroom properties on the market compared to two-bed homes.
Claudia Wood of Demos commented that: “the shortage of housing for older people is no less serious than the shortage of housing for first time buyers. And yet so little is being done to ensure older people stuck in unsuitable properties, and keen to downsize, have this option.”
John Slaughter, Director of External Affairs at the Home Builders Federation, said: “The shortage of specialist retirement housing is the often overlooked part of our housing crisis… Policies need to support existing providers and enable more builders to focus on providing specialist accommodation.”
Recent research3 across 120 major UK towns and cities shows that overall, in two thirds of areas the number of four bedroom properties outweighs two-bed houses, while in Cambridge and Rugby there were 3 four-bed homes available for each two-bed property. However, the North of England provides more choice for downsizers, in St Helens, Hull and Sunderland two-bed properties outnumbered four-beds.
LOOK BEFORE YOU LEAP
There’s a lot to think about when you’re considering downsizing. If you’re looking to raise cash by making your move, you need to do your sums carefully to ensure that it would be worthwhile after taking into consideration all the various moving costs involved such as Stamp Duty.
2Demos, Unlocking the Market, 2017
3Responsible Life, 2019