L&G: Downsizers make up under a quarter of households aged 55 and over
An estimated 24% of all households aged 55 and over, amounting to 2.9 million homes, are marked as potential downsizers according to Legal & General Financial Advice.
However, when Legal & General last analysed the market, in 2018, this figure stood at over a quarter (26%) of households meaning there were then 3.1 million potential houses to be sold.
According to the Office of National Statistics, the total property wealth amongst the over 50s is estimated to be £3.8trn, with three quarters (74%) of those aged 55 and over in the UK owning their own home.
The drop in those aged over 55 considering downsizing means that over the course of the past three years there has been a growing trend in forever homeowners who now want to stay put.
The 2.9 million older households who may sell their home still hold considerable property wealth, with the current value of the housing stock in Great Britain standing at £767bn. However this is a drop from £938bn when the analysis last took place.
The lockdown resulted in us spending more time in our homes than ever before which has perhaps influenced many of this group’s decision not to downsize.
One in four (24%) said they have enjoyed having more space during lockdown and do not want to give that up, while a further one in 10 (13%) decided to invest in their current home rather than move on.
Nearly a quarter of over 55s who have not sold their home stated that they would still consider downsizing but want to see how their financial situation develops before deciding (12%) or are uncertain about the housing market currently (10%).
Sara McLeish, chief executive of Legal & General Financial Advice, said: “The impact of COVID-19 has clearly changed the mindset of many older homeowners and we can see there has been an uplift in those who want to keep hold of their home.
“Over time priorities can change and it is only natural that over the course of the 16 months people have grown closer to their local community, valued having family nearby and enjoyed having the space to relax while in lockdown.
“Of course, the decision to move home is a big one, particularly in later life, and there are practical considerations as well as emotional ones. Our research suggests many over 55s are still open to the idea of moving but are mulling things over before making any decisions so we may see a shift in stance now that lockdown has eased.
“A property is often our most valuable asset and deciding not to downsize presents a potentially difficult situation if the funds are one day required to supplement retirement, or gift money to a family member.
“For those who don’t want to move, unlocking some of the equity tied up in their housing could therefore prove a huge help, particularly when the time comes to make a home fit for older age.
“While this may be a lifeline for some, for anyone thinking about this route it’s important to consider all of your options and seek proper advice before doing so.”