Vicky Dudbridge, a Director in Savills’ New Residential Development team based in Bristol, discusses the new market for downsizers in the South-west.
Savills research states that the number of people aged over 65 is set to increase from 550,000 to 1.4m by 2037, an increase of at least 100,000 every five years. This unprecedented level of growth will be spread geographically and will have important implications for housing within the South-west.
The new downsizer
There is a new downsizer at large in the local market who is cash-rich, having amassed considerable property equity from the sale of the family home. Energetic, modern, outward-looking and young at heart, the new downsizer’s wish list is similar to that of a young professional, with dual incomes and no heavily dependent children.
According to the latest statistics from Savills, a quarter of those buying a property in luxury new-build city schemes are over 60 years old, eschewing the notion that retirees are looking for peace and tranquillity in a bungalow by the sea. Once kids have flown the nest, downsizers typically save 70% of the equity for themselves and free up the remaining capital to help millennials step onto the housing ladder. For those who have been in the market for 20 or 30 years, the amount to invest in their own modern apartment is considerable.
Important factors like security and accessibility are still top of the list for our new downsizer, but this now means lift access and vertical living in a trendy apartment, rather than a compact single-storey house in a cul-de-sac. And security is less about the owner’s personal safety anxieties, and more about their aspiration to lock and leave to travel the world, safe in the knowledge that their property is wind and water tight and secure.
For the new downsizer, it is all about quality over quantity; they no longer want or need the number of rooms the typical family home comprises, but don’t want to compromise on the quality of home they are used to. They are looking for designer kitchens, bathrooms and mod cons, but less space in total. For example, one impressive and spacious entertaining space, rather than multiple reception rooms, and two or three bedrooms is plenty.
Of course, the sale of the family home doesn’t always generate the high levels of equity associated with hot spots such as Bristol and Bath, meaning there will be a target group of consumers with less to spend. The challenge for developers operating in the retirement sector will be providing desirable properties at attainable prices. A two-tier approach is required which will cater both for downsizers operating at the top end of the market, but also for more modest retirement housing. So, although there are challenges for developers in terms of value, the demographics indicate a huge untapped opportunity for the right product.
There is a growing older population with a pressing housing need and equity to invest, representing not only a clear commercial opportunity, but also a corporate responsibility to address the specific needs of this important market.
Main image: The Vincent, Bristol. For more details click here.