Former England footballer John Terry and his family are reportedly downsizing – from a £16m mansion to a property costing just over £4m.
It may not be the typical experience for the vast majority of British homeowners, but there is a growing movement towards downsizing by older people, many of whom are asset-rich but cash poor.
In response to the widely-acknowledged housing crisis, much of the focus has been on helping first-time buyers. Schemes like Help to Buy have supported home ownership for younger people.
The Joseph Rowntree Foundation has also highlighted the increasing unaffordability of rented accommodation and called for greater investment in social housing for young families.
But the housing crisis goes much wider. And the solutions also need to focus on “last-time buyers”, says the all party parliamentary group on housing and care for older people.
Its recent report says helping older people to move from and downsize their home would free up family-sized homes for younger families. It would be a win-win for older and younger generations.
The parliamentarians have called for a “help to move” package of measures to support and encourage older people to downsize. This would include financial measures such as stamp duty exemption, later life mortgages and shared ownership, together with access to specialist financial advice.
Since then, the changes announced by the chancellor in the autumn statement may persuade more older homeowners to move to smaller properties. Reducing stamp duty could make the cost of moving less of an obstacle.
But there are still big barriers to downsizing by older people. Earlier this year, analysis by the downsizingdirect website showed that two factors are particularly important: the lack of housing options for older people and the hassle and difficulty of moving.
The housing market has failed to respond to the growing number of older people with capital who want to move somewhere smaller and easier to manage. The lack of suitable two and three-bedroom homes is definitely stopping some older people moving.
Older people would like well-designed, accessible apartments and houses that have lower running costs but enough space for visitors and storage. As we age and become less mobile, we don’t want to have to move again. A new home should be truly lifelong, where older people can not only enjoy life and get out in the local community, but where they can live with care and support.
Some housing providers are developing new lifestyle options, particularly for those aged 55-70. Barratts has expressed interest in this market. Until more major developers get involved, the availability of options will remain limited.
We also know that moving comes with financial and practical difficulties. The cost of legal, survey and removal fees and replacing goods and furniture can make any capital gain seem inadequate. And decluttering possessions acquired over many years and moving from a familiar home present huge emotional issues.
It’s often this inertia that holds people back. Many older homeowners want to stay close to their social and family networks in communities they know. Moving to a new area too late in life can make it hard to make new friends.
For this group who may wish to stay put there are alternatives to downsizing. They could rent out rooms to lodgers (and the chancellor should look again at the tax-free limit on rent income to encourage this). Or older people could consider a Homeshare scheme, whereby a younger person takes a room in return for practical support and companionship.
There is clearly a younger, older group who may be more disposed towards moving. Prudential says two-fifths of homeowners over 55 are looking to downsize. In the US, there is a growing “tiny homes” movement. Here too, older people may begin to look for different lifestyles, coupled with more freedom to spend their pensions as they wish.
Will the government come up with more elements of a “help to move” package to make downsizing happen? And will planners and developers create the housing options that older people want?
Stephen Burke is director of United for All Ages and downsizingdirect