(qlmbusinessnews.com via uk.finance.yahoo.com – – Tue, 11 Oct, 2016) London, Uk – –
English people aged over 55 currently hold more housing wealth in their homes than the annual GDP of Italy.
Research by Age Partnership, a retirement income adviser, found that £1.5 trillion of equity is locked up in these homes, compared to Italy’s £1.4 trillion of GDP.
This number is made up of the 39pc of that age group who have no outstanding mortgage, but many more will have significant wealth in their properties meaning this is a conservative estimate.
The over-55 population is due to grow by a third in the next 20 years, meaning that by 2036, not taking into account house price inflation, that number will be £1.9 trillion.
This comes as McCarthy and Stone , the retirement home builder, found that 36pc of people aged over 65 in the UK are looking to downsize into a smaller home, which equates to 4.3m people.
The survey of 3,000 over-65s carried out by YouGov (LSE: YOU.L – news) found that 15.7pc of those looking to move live in the south-east of England, the greatest proportion in the country. This represents £122.6bn of property wealth.
Those in the south-west and north-west of England also have high proportion of over-65s who are considering downsizing, at 10.4pc and 12.1pc respectively.
Many of these people want to move but cannot, as there is a shortage of such homes for older people to downsize into. Due to the scarcity, bungalows command a 16pc premium over houses of the same size with stairs.
The UK’s current market for retirement homes is much smaller than that of other developed countries: only 1pc of the people aged over 60 live in retirement communities, compared with 17pc in the USA, and 13pc in Australia and New Zealand.
Clive Fenton, the chief executive of McCarthy and Stone, said that the Government’s focus on first-time buyers with policies such as Starter Homes “overlooks the chronic under-supply of suitable retirement housing essential to the needs of the UK’s rapidly ageing population.”
He added: “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.”
McCarthy and Stone said last month that the number of reservations for their homes has fallen since the EU referendum. This is because the second-hand market, on which the buyers rely to sell their homes to downsize, has showed signs of slowing down.
By Isabelle Fraser