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News Update: Downsizing Delay Shrinking UK Housing Supply

 

It comes as no surprise that the pandemic caused plenty of people to shift their priorities for their choice of home. For most, it’s wanting more room and access to outdoor space, but for over 55s, more and more homeowners are opting to stay in their current homes rather than downsize, as many had planned before the coronavirus outbreak hit.


This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.


Having family and loved ones close by and a spacious home to retreat to, as well as a close-knit community became top of mind for many during the pandemic. Choosing to prioritise community and space meant many older homeowners have chosen to stay put in their homes rather than move on, contributing to the dwindling supply in the housing market. This has contributed to house prices increasing over the last 12 months, despite the wider economic uncertainty.


According to Legal & General, only one in four homeowners (about 2.9 million homes) plan to downsize in the near future, a drop of nearly 200,000 homeowners since 2018. 


An estimated three-quarters of people over 55 own their homes. Homeowners have chosen to invest in their current homes as opposed to moving to a smaller house in an effort to gain some money towards their retirement. This has caused stock to fall drastically all while demand has increased, and as a result, housing prices are rising as well.


The disparity between supply and demand in the market is likely to continue

Government schemes designed to help first-time buyers get on the property market and others like the stamp duty land tax holiday, maintained demand despite the pandemic. As the schemes wind down, the disparity will remain if the shift in lifestyle trends become permanent as we all adapt to new ways of working and living in a post-pandemic world.

Over 55s are often in larger houses, and choosing to stay in their homes will only exacerbate the supply problem as many would-be homeowners are looking for bigger spaces. The lack of availability will drive up the prices of homes that are desirable to homebuyers



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