Last November Chris Pincher, then the housing minister, created a stir when he encouraged pensioners “rattling around” in large homes to downsize and free up housing supply for younger families. For years many pensioners have been reluctant to take the plunge: the financial and emotional costs of moving have held them back. Will the cost-of-living crisis finally cause a shift?
“Older homeowners are the ones sitting on the big properties,” says Gavin Brazg, founder of The Advisory, a consumer advice site for sellers. “Would they rather get out and move into something newer with more energy efficiency, as opposed to putting on more jumpers? A lot of these larger family homes come onto the market in dribs and drabs. But with the cost-of-living crisis, maybe there will be a greater amount of that stock coming on, which would also reduce prices.”
The higher cost of living will encourage downsizing in the next few years, predicts Lucian Cook, the head of residential research for Savills estate agency, but not only to reduce energy bills. “There will be other factors. Increasingly parents and grandparents will be downsizing to provide a deposit to their children. That will become more of a factor when Help to Buy ends next April.”
Younger families should not get too excited about an imminent surge of big houses coming onto the market; it will take a lot more than rising energy bills to shift the downsizers, according to Dr Gemma Burgess, director of the Cambridge Centre for Housing and Planning Research. “That won’t be enough. The transaction costs of moving are still very high. The emotional burden is still a barrier. And most people want to stay in the same community. But if they did move, where would they go? There is a massive supply problem. We build very few accessible houses and age-friendly communities.”
One solution often suggested to encourage downsizers is to give them a cut in stamp duty. Burgess disagrees. “That is the population group who sit on a lot of wealth. Is that equitable to give them a tax break?”
The answers, she says, lie in changes to planning: requiring local authorities to set aside a greater percentage of land brought forward for development for retirement homes, as is the case with affordable housing. Changing the way we build new homes is also key. “We have to think long term. Why not build housing that is accessible, adaptable and energy efficient, so we can stay in it all our lives?”
Until things change, it seems the downsizers won’t be going anywhere.
Source: The Times, February 2022.