Managing Director of Millwood Designer Homes, John Elliott, looks at the current downsizing boom in Britain and how ‘empty-nesters’ could provide a much-needed boost to the UK housing market.
It has long been suggested that encouraging ‘empty nesters’ to move out of larger houses will free up larger homes for families and second steppers, and assist in keeping the UK housing market active. A survey of 3,000 adults by McCarthy and Stone’s Retirement Confidence Index showed that 38% of those over 65 would consider downsizing imminently if the circumstances were conducive. The figures for older movers are set to almost double to more than 11m by 2036. Subject to the Government creating the right conditions for these downsizing aspirations to be met, it is clear that there is a strong and growing appetite from senior homeowners to move to smaller, more manageable homes.
There are many benefits of downsizing to a new-build home, such as releasing equity from a previous property and saving money with the reduced maintenance cost of a new home. A study from Savills shows that downsizers accounted for one in five of new home buyers in the last four years – demonstrating that so-called ‘empty nesters’ are taking opportunities to ‘right size’ into a property that better suits their needs.
Although it need not be a problem, downsizers are often concerned about compromising on space. Older homeowners should be encouraged to downsize in order to free up larger properties, and need not be concerned about this issue – apparently nearly 60% of those downsizing bought houses with four or more bedrooms.
Millwood recognises that downsizing from larger homes will require the new home to accommodate larger furniture. The company aims to provide spacious rooms, and is occasionally able to adapt homes for this by creating three-bedroom homes out of a four- or five-bedroom property.
The Paddock, Millwood’s West Sussex development, has mainly been popular with older buyers – despite the development offering four- and five-bedroom detached homes. Generally, these properties have smaller gardens than the buyers’ previous homes and are designed to be warm, energy efficient, and maintenance free.
Another factor affecting this sector of the market is stamp duty. It is considered that around 10% of older homeowners would be encouraged to move immediately if some of the penal stamp duty regulations imposed by George Osborne were to be removed or materially reduced. This could result in a further 1.2m downsizers, creating better movement across the market and benefitting first time buyers and second steppers. The Government, in its upcoming Autumn Statement, should seriously reconsider the levels of stamp duty if it wishes to create a more fluid housing market.