Yahoo Finance Cost of living crisis: Will soaring bills encourage empty nesters with spare bedrooms to downsize sooner?
More than 3.6 million homes across the country owned by over 65s have at least two spare rooms, which represent an average of £129,000 that could be released by downsizing, according to data from estate agent Savills.
It’ll come as little surprise to Londoners that homes in the capital have the highest potential gain, with an average of just over £239,000 tied up in extra bedrooms.
Given the latest cost of living figures, led by Ofgem’s announcement last week of an 80 per cent increase in the price cap, the report reveals potential for over 65s with space to spare.
From October, the average gas and electricity bill will leap to £3,549, with the energy needed to heat extra rooms eating into household budgets.
There needs to be a change in attitudes to downsizing. Greater focus should be given to the provision of retirement housing that the older generations aspire to live in.
It’s a looming prospect that may well mark a mindset shift in this demographic, says Lucian Cook, head of residential research at Savills.
“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 three per cent of homeowners over the age of 65 are dissatisfied with their current home and only 36 per cent 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,” continues Cook.
According to the English Housing Survey, 5.45 million householders over the age of 65 own their own home - a number that has risen by 27 per cent over the past 10 years. Two-thirds technically under-occupy their homes, and Savills suggests there are almost 1 million (960,000) more such households than a decade ago.
With 94 per cent owning their property outright, it’s clear that there is huge capacity for older homeowners to rethink how they might best balance their resources.
The report paints an uneven picture across the country. While London’s over 65s might have the most to gain, it shows that homeowners in the South East are sitting on almost a quarter of the total value - it equates to £11 billion. For those in the North East, meanwhile, the average figure is £59,800.
“Longer term, if we are going to make more efficient use of our existing housing stock, there needs to be a change in attitudes to downsizing, not just among individuals but also among policy makers,” says Cook.
While most of the focus of housing policy is about getting younger generations onto 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.”
