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A few years ago, I had the opportunity to interview a widow in her 70s who had sold her house and decided to move in with two other women of similar age. They reached agreements on splitting the bills and even on which artwork to showcase in the sitting room. To her surprise, she found this house-share experience to be truly liberating. Interestingly, these older ladies are living a lifestyle that many millennials are currently desperate to escape.
Downsizing presents a partial solution to the currently prevalent housing crisis in Britain. The skyrocketing mortgage rates are causing distress, particularly for the 1.4 million homeowners whose fixed-rate deals are expiring this year. Meanwhile, tenants are feeling the squeeze as landlords pass on the rising costs. As successive governments grapple with building new homes, the hope for Generation Rent is dwindling. However, if we could convince some of the over-65s, who are more likely to own their own homes, to sell their large houses, it would significantly improve the chances for young families to move up the property ladder.
Reallocating existing housing stock has a greater impact than constructing new homes, given that new builds make little dent in the overall situation. The current state is inefficient, with approximately one-third of homes in England being under-occupied, featuring two or more bedrooms that are rarely used. These properties are mostly owned by pensioners, among whom around a quarter express a desire to downsize. The numbers are significant, with a survey revealing that 1.4 million people over the age of 65 are keen to move to smaller houses within the next five years.
The term “under-occupancy” carries emotional weight. What one person may perceive as wasted space, another may view as a study or a bedroom held for adult children returning home burdened with student debt. With seniors already accused of “bed blocking” hospitals due to shortcomings in social care, it is crucial to avoid triggering conflict over their supposed “hoarding” of bedrooms. Instead, we should be doing more to assist those who genuinely desire to downsize. Currently, around 60% of the UK’s housing stock consists of three or more bedrooms, while the number of single-person households continues to rise. Experts indicate that the decommissioning of bedrooms due to children moving out nearly matches the replenishment from new build homes.
The advantages of downsizing, or more aptly, right-sizing, are evident. Large houses are often costly to heat, draughty, and feature gardens that pose challenges for aging knees. Selling property can provide equity for children or opportunities for travel. Flats generally involve fewer stairs and sometimes offer better amenities. Retirement communities, as they are known, offer a simpler way of life along with opportunities to meet new people.
Through my research on aging, I have encountered numerous contented downsizers. One man mentioned how he enjoys taking turns running the retirement village shop while knowing his ailing wife is well taken care of. Another couple sold their “forever” home to a young family and moved to a cottage in the same village. They now occasionally babysit the child growing up in their former house. These stories demonstrate that downsizing can bring fulfillment, despite the emotional challenge of leaving one’s long-held residence and sorting through a lifetime’s worth of possessions. The increasing popularity of private decluttering services indicates that individuals often require support in this process. Certain local authorities offer assistance with moving logistics. Nevertheless, downsizing can still be perceived as a downgrade.
The financial aspect and complexity of the transaction present another obstacle. For most fortunate homeowners, their property represents their greatest asset and serves as a store of wealth to pass down to their children. Consequently, selling a home can be a particularly delicate matter. I have heard stories of couples having second thoughts about selling after receiving disappointing valuations that reflect outdated decor and plumbing from over three decades ago. Additionally, some individuals refuse to downsize due to their resentment of paying stamp duty on a new purchase. It would be prudent to consider treating “last-time” buyers on par with first-time buyers when it comes to stamp duty, granting them a break on purchases up to £425,000. While the Treasury may be hesitant to offer additional incentives to the elderly, it could be worthwhile in expanding the availability of larger homes.
Another challenge lies in finding suitable alternatives for downsizers. Developers tend to focus on building one-bedroom flats, but grandparents often prefer having two bedrooms to accommodate visiting friends or grandchildren. Both council tenants and homeowners can find themselves trapped in inadequate housing. Fortunately, some innovative solutions are emerging. The Redbridge Council in London, for instance, provides opportunities for both social housing tenants and homeowners to downsize through mutual swaps.
Currently, there exists a wide range of housing options catering to older individuals, ranging from sheltered accommodation to luxury retirement villages. Not everyone can afford nor desires to live in one of these communities. However, the choices are limited, as retirement housing only constitutes 2.5% of the UK’s 29 million dwellings. A 2011 study revealed that merely 1% of Britons over the age of 60 had moved into retirement housing, whereas the figures were 17% in the US and 13% in Australia and New Zealand. One contributing factor is that the UK lacks a specific planning use class for housing with care, unlike some other countries.
Leasing a flat can be daunting for individuals who have been accustomed to owning a freehold property for years. Yet, it can also signify a fresh start. Caution is required, as there have been incidents where retirement villages concealed fees in complex leases. On a positive note, evidence suggests that certain types of “extra care” community housing can improve health and alleviate the burden on the NHS, as neighbors watch out for one another and combat isolation.
Overall, downsizing has the potential to benefit all generations—a rare occurrence when it comes to housing matters.
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