New research study released today by Legal & General and Cebr
“Last Time Buyer” market (LTBs) worth £820 billion, including 7.7 million spare bedrooms, says new research from Legal & General and Cebr 3.3 million UK homeowners aged 55+ looking to downsize in future Total volume and assets of LTBs will be 3.8 million properties worth £1.2 trillion by 2020
A new research study released today by Legal & General, the FTSE100 financial services group, and Cebr, the economics consultancy, has quantified the size and shape of the UK's "Last Time Buyer" (LTB) market for the first time, and in doing so has identified 5.3m under-occupied homes in the UK, with 3.3m LTBs looking to downsize. The LTB market owns 7.7m spare bedrooms and a total of £820 billion of housing wealth, set to reach £1.2 trillion in 2020.
Nigel Wilson, CEO of Legal & General, said:
"The Last Time Buyer market is an overlooked part of the housing market, yet it could play a significant part in solving the UK housing crisis. Helping young people to get onto the housing ladder through initiatives like Help to Buy 2 is important, but enabling older people to realise their downsizing dreams could have a far greater impact in terms of unlocking family housing stock for people to buy."
Key figures from Legal & General's study of Last time buyers:
Free up housing stock (PDF: 3.08 MB) (LTBs) include:
- 5.3 million under-occupied homes
- 3.3 million LTBs looking to downsize
- 7.7 million spare bedrooms
- £820 billion LTB housing wealth, reaching £1.2 trillion in 2020
- Typical LTB lives in a 4-bed house, but wants a 2-bed property
- Almost a third of older homeowners considered downsizing in the last five years; only 7% actually did
- A majority (58%) put it off until after 70; a quarter until 80 or older.
The most common reason for considering downsizing by over 55s is that their property no longer meets their needs. Many older homeowners allow inertia to keep them in their current home which is no longer fit for purpose and which is expensive to maintain. This is a particular issue for older homeowners, many of whom don't work.
Many of the over 55s – and 63% of those with at least two spare bedrooms – do intend to move, but all too often, they leave it late. More than half believe that it will be best to wait until they are over 70 before moving, and a quarter will wait until 80.
Common reasons for homeowners to consider downsizing are that a current property has become unsuitable because of stairs or a large garden (45%) and the property becoming too large for their needs (33%). However whilst, Legal & General's research shows that almost a third of older homeowners have considered downsizing in the last five years, fewer than one in ten (7%) actually did move.
Nigel Wilson concludes:
"To unlock the potential of the Last Time Buyers market, we need to build more of the right type of housing (two bedroom properties suitable for older people and near family, friends and facilities); the right tax regime to incentivise moving, with stamp duty a key focus; and better options to allow for equity release so if older people want to stay put by accessing their housing wealth they can. If we get those right, we can help older people in the UK move to properties which better fit their lifestyles and their needs, and, in doing so, free up larger properties suitable for growing families."
For the report, please click here: Last time buyers:
Free up housing stock (PDF: 3.08 MB)
NOTES TO EDITORS
ABOUT LEGAL & GENERAL:
The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.
The Legal & General Group, established in 1836, is one of the UK’s leading financial services groups. As at 31 December 2014, the value of our assets under management across the group, based on current economic conditions, is £710 billion. We have over nine million customers in the UK for our life assurance, pensions, investments and general insurance plans.
Legal & General is one of the biggest providers of index-tracking investments in the UK, managing £274.8 billion as at 31 December 2014.
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