Our latest research into ‘last-time buyers’ in conjunction with Cebr found the value of UK housing stock owned by over-55s is set to grow by 51 per cent in the next five years. This increasing proportion of homes in the hands of older borrowers could further block the housing market, restricting the choice available to growing families trying to upsize.
There are currently 3.3 million last-time buyers looking to downsize but struggling to find suitable properties to move to. In order to end this market stalemate the industry needs to work together to remove the barriers stopping people from right-sizing.
Almost a third of older homeowners considered downsizing in the last five years but only 7 per cent actually did. This illustrates the fact many stay in unsuitable homes not because they want to but because they feel they have no choice.
The main barrier to right-sizing is the lack of supply. It is therefore crucial the country not only ramps up housebuilding but does so strategically by constructing more homes of the right size and in the right places.
The lending industry has a role to play in tackling this crisis, which is likely to give rise to a greater range of more flexible, innovative products catering to older borrowers. And increasing options for older borrowers will create a greater need for advice. It is crucial brokers heed this upcoming paradigm shift now by altering their client acquisition tactics, carving out a share of this untapped area of the market.
Stephen Smith is director of the Legal & General Mortgage Club