Are rising house prices boosting downsizing?

08/08/14
 

Almost everyday there seem to be new reports that house prices in the UK continue to increase. The biggest rises are in London and surrounding areas but throughout the country prices are still rising much faster than salaries.

While there has been a lot of commentary about the impact of rising prices on younger generations trying to get onto the housing ladder, little has been said about the effect on older homeowners.

The recent English Housing Survey has revealed that half of owner occupiers own their house outright and 85% of outright owners are aged 55 plus.

Without a mortgage, are these older homeowners looking at options to sell up and move to a smaller property, thereby releasing cash? 

The Sunday Times ran an interesting feature on 3 August about couples in their mid-50s who have sold up but bought two properties with the proceeds - one smaller home where they currently live and work and one bigger property where they hope to retire.

Clearly rising house prices could enable many of the 2.3 million households aged over 55 to make the move that Prudential research recently said they wanted to. A buoyant market should make it easier to sell and buy.

But the big issue for many will be having the right options at the right time.  Are there enough of the right homes for downsizing older people? And will the housing market respond to this growing demand?

Until the options are there, fewer older people will be able to sell and release the family-sized homes that many younger people desperately want.

Stephen Burke is founder of www.downsizingdirect.com and director of United for All Ages and Good Care Guide

 

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