Savills calls for change in attitudes to downsizing

Downsizing could become more attractive to older homeowners as the cost of living crisis intensifies, Savills claims.

It comes as analysis by the agent suggests there is huge potential for older households to unlock housing wealth by downsizing to smaller homes. 

Across England, there are 3.6million homes owned by the over-65s with at least two spare bedrooms, according to the English Housing Survey. 

Savills analysis shows that moving to a smaller home that might better fit these homeowners needs could unlock an average of £129,000 per household and a total of £469bn across England as a whole.

The analysis shows the huge range in the average sum that could be unlocked, from just under £60,000 in the North East to just over £239,000 in London.

Almost one-quarter of the resulting “unlockable” housing wealth sits in the South East of England, some £111bn, over 40% more than across the North East, North West and Yorkshire and Humber combined.

Such a move would increase help boost housing stock for sale.

The number of households over the age of 65 who own their own home has risen by 27% over the past 10 years to 5.45m, according to the English Housing Survey.

Of these home owners 94% own their homes outright and 41% have lived there for 30 years. 

The same data source suggests two-thirds of these are technically under-occupying their home, with Savills estimating that this number has increased by almost 1m (960,000) in the past decade.

Lucian Cook, head of residential research at Savills, said: “Traditionally, homeowners have understandably been reluctant to downsize given their attachment to the former family home, a lack of financial incentive to do so, and a limited supply of good quality retirement accommodation to entice them to make the move.

“Indeed, the English Housing Survey tells us that only 3% of homeowners over the page of 65 are dissatisfied with their current home and only 36% of movers are looking to move to a smaller or cheaper property.

“However, with the costs of running a home increasing so rapidly, the financial benefits of downsizing are likely to come to the fore over the next 12 to 18 months and for some, this will outweigh the feared upheaval of a house move.”

Cook added that there needs to be a change in attitudes to downsizing if the market is going to make more efficient use of the existing housing stock.

He said: “While most of the focus of housing policy is about getting younger generations on to the housing ladder, arguably much greater focus should be given to the provision of retirement housing that better suits the needs of active downsizers and that the older generations aspire to live in.”