Millions of retirees across the UK are considering downsizing to release equity to fund their retirement including 513,000 in the North West, finds McCarthy & Stone in its inaugural Retirement Confidence Index. 

Developed in conjunction with YouGov, the survey of over 3,000 UK adults aged 65 and over by the UK’s leading retirement housebuilder notes that the age group has approximately £128 billion of housing wealth in the North West, £122 billion – or 95% – of which is un-mortgaged providing them with the scope and flexibility to potentially benefit from downsizing and equity release should they wish to do so.

Almost two in five (39%) adults aged 65 and over in the North West are considering downsizing, saying that they are likely to move from their current property in the future if suitable properties become available. This equates to approximately 513,000 people in the region, who – were the homeowners among them to proceed – would release homes with a combined value of some £49.5 billion.

McCarthy & Stone’s figures show that many people have already started making the move. Figures this year show that the company has helped their customers release c.£42,0000 each of equity, once they have downsized. 12% of these also released more than £100,000. The ability to release equity from the value of homes in later life provides a strong economic argument for downsizing.
 In addition, 63% of those aged 65 and over in the North West expect to use their housing wealth to fund at least some of their future adult social care requirements. As health among older age groups deteriorates, the need to downsize to more appropriate accommodation is likely to become more important. A third of (33%) retirees in the region feel it is likely that they would have difficulty living in their current home due to changes in their health and/or mobility, according to the survey.

Enabling people to downsize and release this significant level of UK housing stock is a key part of the equation in solving the UK’s housing crisis, helping to unlock housing that can then be taken up by families and first time buyers.

With 11.4 million people aged 65 or over in the UK, just c.141,000 units of specialist retirement housing for ownership have ever been built. A greater provision of housing suitable for later life is needed and McCarthy & Stone has been calling for national and local policy makers to use the planning system to focus more on the needs of older people.

 More suitable housing reduces the need for social care and limits the impact of the ageing population on local and national government budgets. As part of the forthcoming Autumn Statement, the company is also calling for a stamp duty exemption for older people looking to downsize and greater Government support in planning to boost the supply of retirement housebuilding.

Ian Wilkins, Regional Managing Director at McCarthy & Stone (North West Region), said:

“We are encouraged to hear that the new Government is going to extend housing policy beyond starter homes. As important as this area is, it overlooks the chronic under-supply of suitable retirement housing essential to the needs of the UK’s rapidly ageing population. Those aged 85 and over are expected to more than double in the next 20 years to 3.2 million and those 65 and over are expected to increase by more than 50% to 17.2 million. Unfortunately, the UK’s housing stock is woefully unprepared for this demographic shift to the ‘extended middle age’, and this has created a new ‘Generation Stuck’ dilemma..

“Across the UK, there is soaring demand for retirement housing, creating an unprecedented opportunity for new supply in this area. However, while more than four million retirees are thinking about moving from their home in the UKs, they are locked in due to the lack of housing suitable for later living. With greater retirement choices, we would be able to improve the lives of older people, release millions of under-occupied family-sized homes onto local markets, stimulate housing chains and help younger people move up the ladder.

“This must be the next focus for Government, and the forthcoming Autumn Statement provides an opportunity to re-align housing policy. The Government has shown, through its Help-to-Buy scheme and other initiatives aimed at first time buyers, that it can influence market supply. It’s now time to support the housing choices of those in later life.”

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