The government should do more to help older homeowners to downsize, a new study has claimed.
In anticipation of the government’s housing white paper, which is released today (7 February), Legal & General's last time buyer report highlighted the growing market of last-time buyers (LTBs), who own larger properties but can’t afford to downsize.
The report, which was created by Legal & General and CEBR, identified 5.3 million under-occupied homes in the UK, and 7.7 million spare bedrooms.
It found the typical last-time buyer lives in a four-bed house, but would rather live in a two-bed property.
In fact, 3.3 million last-time buyers said they would like to downsize, and while a third of older homeowners have considered downsizing in the last five years, only 7 per cent actually did.
Legal & General believes this is due to the prohibitive cost of downsizing and a lack of suitable properties, and called on the government to address these issues.
“The housing minister this weekend confirmed that the much-anticipated housing white paper will include provisions for older homeowners looking to downsize,” said Stephen Smith, director of Legal & General Housing Partnerships.
“What shape this assistance will form, however, remains unclear. The last-time buyer market is a hugely over-looked segment of the housing sector, with commentators and indeed the government, often preferring to focus on the first-time buyer end of the spectrum.
“However, older homeowners are pivotal to the health of the wider market. Millions of people across the UK are trapped in homes no longer suitable for their needs, due to the prohibitive costs of downsizing as well as a severe lack of suitable properties available for them to move into.
“By building more properties which are designed with the older buyer in mind, and by incentivising last time buyers to move with an overhaul of the frankly outdated stamp duty tax, the government could make huge strides towards redressing our housing crisis.”
The L&G and CEBR report estimated that there is approximately £820bn in last-time buyers housing wealth in the UK, and this is expected to reach £1.2 trillion by 2020.
