Market outlook: Will downsizing free up properties in 2022?
This month, the BBC reported a story of payments being offered to west Devon housing tenants who opt to downsize. Could this be one solution to free up much-needed family homes in the UK?
The bold move made by councilors is to address a shortage of suitable rental properties for families. Rising house prices and a lack of homes on the market have led to a housing crisis in this part of the country, but Devon is not alone in facing this situation.
The plan is to offer tenants who move to a smaller home a £1,000 fixed payment, with an extra £500 per bedroom released as a bonus. Tenants downsizing from a three-bedroom house to a one-bedroom property would receive £2,000, for example. There is also discussion of a discretionary £5,000 lump sum in areas of West Devon where the housing market is particularly strained.
Generally, it seems that older homeowners are keeping hold of their properties. A report from Legal & General Financial Advice at the end of Summer 2021 finds that fewer than one in four households headed by someone over 55 years old plan to downsize in the near future. This is a smaller proportion than when the survey was conducted three years ago.
Supply is everything
In contrast somewhat to the general trend, Showhouse magazine recently reported that 1.8 million over 55s are actively thinking about downsizing because of the pandemic. Based on research by Audley Group, key reasons cited were to live in a home that suited the property owners changing needs, required less maintenance and was in a better location, such as being closer to family and friends. The Group has seen a surge in demand for its retirement village properties, with the average age of buyers falling.
The numbers of homeowners downsizing will ultimately come down to the number of smaller properties on the market. Supply, or the lack of it, is once again the issue.
10 tips for downsizing
- Only keep objects that you use, need or love
- Don’t save too many items for the next generation
- Give to family, friends and charities now
- Stop acquiring new items
- Think about the layout of your new smaller property and only take items that have a home
- Shred unnecessary piles of paperwork
- Go fully digital with your film watching and music listening
- Keep one of each item if you have several of these
- Don’t try to downsize all at once
- Begin now, it’s never too early to declutter
Which? has a useful guide on downsizing to a smaller home in retirement: https://www.which.co.uk/news/2021/07/is-downsizing-to-a-smaller-home-right-for-you/