Barclays surveyed thousands of homeowners to investigate why so many people live in 'under-occupied' properties rather than choosing to move to smaller homes.
Read on to find out more about the barriers facing older homeowners, and the knock-on effect on housing supply for people trying to move up the property ladder.
Millions of households could be open to 'right-sizing'
A new report by Barclays has found that an estimated 3.8 million households would be open to ‘right-sizing’ (by moving to a smaller property) if doing so was made more straightforward and financially attractive by the government.
As it stands, less than half of these households say they are open to moving home in the next two years.
Barclays investigated ways to improve the shortage of housing available to people moving up the property ladder. It found that 85% of owner-occupied properties have at least one spare room, but that significant logistical and financial barriers made moving to a smaller home less attractive.
The barriers to moving home
Emotional factors were important when it came to downsizing: 61% of respondents to Barclays' survey said they felt an emotional attachment to their current home. Taking this into account, just 20% said they felt that people should downsize to free up homes for others.
Stress was also cited as a key issue for staying put: 85% said they felt that moving home was 'always' stressful, while 40% were concerned about the complexity of the moving process.
Moving motivations
Prospective movers are also put off by the lack of suitable homes available to them. This has long been an issue in the housing market.
For example, many older homeowners don't want to move into purpose-built retirement housing, such as a retirement 'village', and dwindling numbers of more accessible homes, such as bungalows, are being built.
Of those surveyed, 40% said financial assistance would make them more likely to move home, while 39% said the prospect of having a home that requires less maintenance would make moving more attractive.
When should you consider downsizing?
When to downsize, if at all, is a personal decision. On the one hand, downsizing could involve moving somewhere that suits your current needs better or somewhere that will be more suitable if your circumstances change. On the other hand, you might not think the emotional, financial and logistical stresses of moving are worthwhile.
If you take out an equity release product recommended by HUB Financial Solutions, Which? will earn a commission to help fund our not-for-profit missionHow much money could you unlock by downsizing?
We found that someone downsizing from a four-bedroom property to a two-bedroom home in London could release as much as £414,000.
This figure is inflated by London’s high property prices. Our findings showed that a homeowner in London would unlock around 46% of the value of the larger house when downsizing, while someone in the North East of England could unlock 56% of the value of their home.
You’ll also need to consider the other potential costs of downsizing, including stamp duty, estate agent fees, conveyancing and house surveys. Finally, you'll need to be realistic about timings. It could easily take up to a year to prepare and sell your home and move into another property.
Find out more:Housing measures to encourage 'right-sizing'
Barclays has suggested a series of measures that it says the government could implement to help free up capacity in the housing market.
It suggests introducing targeted incentives for people downsizing, including grants, vouchers or the ability to offset moving costs against stamp duty.
It also recommends making the homebuying process more straightforward, improving the visibility of new housing developments, and building more retirement and age-suitable housing for older people.
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source https://www.which.co.uk/news/article/how-can-downsizing-be-made-more-attractive-to-homeowners-a2d5D4H1iO9D