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 by various commentators that by encouraging ‘empty nesters’, to move out of larger houses, it will free up a quantity of larger homes for families and second steppers and assist in keeping the UK housing market active. Seemingly, three thousand adults, surveyed by McCarthy and Stone’s Retirement Confidence Index, showed that 38% of those over 65 would consider downsizing imminently if the circumstances were conducive. It is suggested that the figures for older movers are set to almost double to more than 11 million by 2036. Subject to the Government creating the right conditions in which these downsizing aspirations can be met, then it is clear that there is a strong and growing appetite from our more senior homeowners to move to smaller, more manageable homes.
Clearly there are many benefits in downsizing to a new build home, not least of which is releasing equity from their previous property and of course saving time and money on the maintenance cost of a new home vs a second hand or period home. Savills reports that downsizers account for 1 in 5 of new home buyers over the last 4 years, which demonstrates that so called ‘empty nesters’ are taking opportunities where they can to ‘right size’ into a property that better suits their needs. These dynamics become particularly apparent after children have left the family home.
Compromising on space is a concern that downsizers have but need not necessarily be a problem, and whilst I believe we should encourage older homeowners to downsizer in order to free up the larger properties, it should not mean that they will lose out. Apparently nearly 60% of those downsizing bought houses with 4 or more bedrooms.
At Millwood we recognise that downsizing from larger homes means larger furniture and more space needed in the new home although not necessarily more bedrooms. We try wherever possible to provide spacious rooms, and if buyers are available early enough we can occasionally make more spacious homes by creating 3 bedrooms out of 4 or 5 if that is what is required. Several of our new homes developments are modest in size and rather than looking like estates, have more of a village feel in attractive countryside locations.
Our development in West Sussex, The Paddock in Ansty, has been especially popular with older buyers despite the development offering 4 and 5 bedroom detached homes. Generally these have smaller gardens than the homes that they leave behind, but most particularly, will be warm, energy efficient and maintenance free.
There is another factor that is affecting this sector of the market, and it is that of stamp duty, about which I have written previously. It is considered that around 10% of older home owners will be encouraged to move now if some of the penal stamp duty regulations imposed by George Osbourne were to be removed or materially reduced. This could result in a further 1.2 million downsizers resulting in much better movement across the market as a whole and providing a huge benefit for first time buyers and second steppers. I believe the Government, in its upcoming Autumn Statement, should have serious regard to the levels of stamp duty if it wishes to create a fairer and more fluid housing market.