With the UK property market in a bit of slump there has been much discussion around how to ignite it. There has been a lot of talk about incentives for first-time buyers but what last-time buyers?
Older property owners could help to reignite a slow property market if they were given an incentive to make a final move or downsize.
Currently, older homeowners hold a disproportionate bulk of the UK’s housing equity, making up £1.8 trillion of the UK’s £2.8 trillion property total.
The majority of this wealth is comprised of established family homes coveted and needed by younger families.
Whilst the property market could benefit from unlocking this housing stock, poor choice of alternative options, a lack of Governmental support and few older homeowners needing to move is attributing to a bunging up of the property sector.
Older Generations Want To Move
47% of homeowners over the age of 55-years-old, the equivalent of 4 million households, plan to downsize, according to ‘Last-Time Buyers: the challenges and opportunities for 55+ homeowners wanting to move’ by IMLA1.
Similarly, a report by Legal and General suggested that 3.1 households owned by older homeowners were looking to downsize with this rising to 3.7 million by 2026.
The IMLA research also indicated that 200,000 of the 1.18 million transactions in 2018 and the predicted average of 1.21 million housing transactions per year until 2022 are attributed to last-time buyers. This figure has almost doubled in the last decade and is helping to underpin the housing market.
Unfortunately, several factors are preventing this key demographic from downsizing with more gusto.
Over a third of respondents to the IMLA survey cited a lack of suitable homes as a barrier to selling their family stock and moving into more appropriate accommodation.
Almost a quarter (24%) were clear that the cost of moving is a deterrent with almost a fifth (16%) worried about the current price of property
97% of 2002 leading figures in the later life housing sector believe that a shift towards new build construction of later life living accommodation will create a right sizing culture in the UK and alleviate the housing crisis, according to Housing LIN and Shakespeare Martineau.
Furthermore, 73% of architects, local authority workers, designers and private developers predict the later life housing market growing in the next five years which could encourage more older homeowners to take the plunge and downsize.
However, 89% of respondents felt as though Governmental policy was stifling this section of the market with reforms to planning laws and legislation needed before progress could be made to this forgotten section of the property market.
Legislative Change a Prerequisite for Cultural Shift
A third of respondents to the LIN research called for swift legislative changes and tax breaks to make a move away from the family home more appealing.
44% of respondents to research by McCarthy & Stone also agreed that more help should be offered to older home movers to help unbung the current housing stock.
61% thought stamp duty exemptions would encourage downsizing with savings of £5,000 on a £300,000 property likely to incentivise moving into a more appropriately sized home. Furthermore, 40% would move if this exemption was put into law.
Almost two thirds (59%) were of the opinion that Government policy should ensure suitable new build accommodation is prioritised to ensure the necessary stock is available to the older demographic.
Communication is key
Like all property buyer’s communication will play a big role in reinvigorating this key market segment. Last-time buyers leaving their established family homes will want assurance that any move they make will be in their best interest and not put they finances at risk. They will expect a fast and efficient process that clearly identifies potential issues which is where accurate and reliable property searches are vital. GlobalX are a trusted supplier of regulated / personal local authorities searches are a member of the Council of Property Search Organisations (COPSO). If you would like to discuss our personal search option call us on 0800 197 1757 or complete our online contact form.