With a growing population, and one that is getting older, the homebuying habits of those close to or already in retirement are increasingly important. There are many in the property industry encouraging those of retirement age to move out of underpopulated, large homes into something smaller and easier to look after.
However, there’s a lot more to ‘downsizing’ than simply selling one property to buy another. What should these homeowners consider when they think about downsizing? We’ll take a look at the pros and cons but to start with, what is the nature of downsizing and where does it currently stand within our housing market?
Downsizing has been a bit of an industry buzzword for a few years, reflecting a trend for older homeowners to find smaller homes later in life. Terry Holmes, director at Beresfords, the largest independent estate agent in Essex and Greater London, says: “Downsizing is ideal for anyone sitting on a lot of equity in their property and wants to free-up some capital. Traditionally, we’ve thought of retirees downsizing, but a lot of ‘empty nesters’ are making the move to downsize a lot earlier – the kids have left for university, chances for their children to get on the property ladder are decreasing, so for those able to downsize it does offer an instant capital gain, which they can use to suit their family’s needs.”
Some may take the ‘empty nest’ quite badly, but the current generation in this position has had some luck in terms of how well they may have benefitted from soaring house prices over the past 30 or more years, and generous pensions.
“Retirees are also downsizing much more than they ever did before,” adds Holmes, and he sees a major change in attitude from many in that age group as being the key to this. “There’s been a move away from clinging on to the family home to pass on to the kids, and much more emphasis on retirees living their lives, whether that be going on far-flung holidays or indulging in their hobbies.”
There were high hopes at the start of 2017 that the concept of downsizing was going to play a part in the government’s much anticipated, and frequently delayed, White Paper on housing. The minister for housing, Gavin Barwell, told journalist Robert Peston just two days prior to the unveiling of the document that incentives would be given to older buyers selling up large, underutilised homes, but it soon became clear that the word ‘downsize’ was not used once within the White Paper’s 104 pages.
Malcolm Booth of campaign group Later Life Ambitions, which represents some 250,000 pensioners, expressed further dismay: “We are disappointed that the White Paper does not include measures to reform stamp duty. It is important that older people do not face cost barriers to taking up the government’s measures on the new later life homes which will be built as a result of the government’s new planning policy. A first step towards this would be to introduce further changes to stimulate the property market and free up valuable family-sized homes.”
Recently, think tank the International Longevity Centre (ILC) reported on the need for a “retirement housing revolution”, saying that there were around 515,000 properties in England dedicated to people of retirement age, representing just 5% of the number of people who would qualify for this type of home. Its research also found that almost 90% of those aged between 65 and 79 currently live in under-occupied housing, with over half living in a home with two or more bedrooms more than are required.
When it comes to the properties that potential downsizers are thinking about purchasing, perhaps the simplest division is between homes that are aimed exclusively at retirees and the rest of the property market.
The market for dedicated retirement property is still small in the UK compared to countries such as Australia, New Zealand and the USA (around 17% of retired Americans live in property aimed specifically at them), but it is a growing sector here, with some very ambitious specialist developers producing an impressive range of new homes to suit a wide budget. The slow start to this sector is especially surprising given the UK’s reputation for a love for homeownership, continuing into later years. Many might prefer, if they can, to live in their own property with the services they need available to them, rather than effectively renting a room in a nursing home.
The targeted properties for sale in the UK encompass a wide spectrum, from ‘lifestyle’ options that are age-exclusive (usually one of the property’s buyers needs to be 55+) but don’t offer anything in the way of care or special services, to ‘extra care’ developments with the highest level of bespoke assistance for each resident. In between are ‘retirement living’, where each property has connections to emergency care and there are a few basic communal facilities for homeowners to enjoy, and ‘assisted living’, where there is on-site medical and domestic care that can be tailored to a resident’s needs.
If the temptation is there to move into a smaller property in later life, it’s worth looking at the concept from different angles to see whether the potential pros and cons will fit in with how you’re hoping to live through your years of retirement.
The pros of downsizing
Freeing up funds – Releasing some of the money you’ve made on your old home could transform your life, allowing you to splash some cash on a one-off purchase (a new car or luxury holiday, for example) or giving you something to invest over the coming years, as a pension of savings nest-egg. Energy-efficient brand new homes will cut monthly expenses dramatically too. You can also transform your family’s lives too – perhaps providing a contribution to a house purchase, wedding or university life for a loved one.
“Often, our residents have found themselves sitting on plenty of equity with their properties appreciating in value over recent decades, so the decision to sell now is financially beneficial and a prime opportunity to release capital,” says Craig Percy, chief operating officer of LifeCare Residences, which has built the luxury Battersea Place development just south of the River Thames. “Furthermore, with children and grandchildren based in London, the decision to move into the capital is straightforward.”
Less domestic drudgery– Moving into a home with fewer rooms will reduce the cleaning duties, and a smaller garden will save a host of physical effort all year round. Choosing a new build home will leave you with no maintenance to do, often an ongoing chore in older homes where plumbing, electrics, paintwork, drains and countless other elements need regular looking after or expensive replacement.
Disposing of the unnecessary – Many of us are collectors of some sort, often not very organised, so over the years we end up with piles of stuff that is actually of no use or interest to us whatsoever. Moving into somewhere smaller is a great way to go through everything and, if necessary, be ruthless about what you really want to take to your new place.
Re-activating your social life – This is especially true on a dedicated retirement development, where facilities are provided for residents to meet and mingle. From simple gardens and lounges to the more lavish schemes which provide gyms, pools, activity rooms, bars and restaurants, the opportunity to meet like-minded people and form new friendships is hugely beneficial, particularly to those living on their own.
Craig Percy of LifeCare Residences adds: “As luxury retirement community operators, we have found that a significant proportion of our residents at Battersea Place have been drawn to the opportunity to live amongst likeminded people in a thriving community, without sacrificing their broader social network. We have installed an extensive suite of amenities such as a pool and gym, craft room, residents’ lounge, cinema and library, as well as an entertainments programme, to encourage integration and a lively social scene.
Improved health – Living in an energy-efficient home provides a comfortable environment that can only benefit general wellbeing. Additional facilities, from simple gardens and lounges to pools and gyms, give easy access to further opportunities to get regular exercise. On-site restaurants on developments for senior residents are tailored to offer nutritious dishes for their audience.
The cons of downsizing
A sentimental journey – For many, living anywhere for a long time creates an emotional attachment to the home. A survey of over-55s undertaken by the ILC in 2016 showed nearly one in three questioned citing sentimental connections as a reason for not downsizing, rising to nearly two in five in those of 75 and over. It’s not easy to face the departure from a home full of memories, even for all the advantages a new property may bring.
Too much trouble – A Which? survey from 2015 showed buying and selling a home behind only divorce in terms of stressful life events. The legal processes involved, together with the inconvenience of packing and moving possessions from one place to the next, is a major factor in some people’s decision not to change home.
Not enough space – Having spare bedrooms and reception rooms for special occasions and visits is important to many people, and the thought of sacrificing them in a smaller new home is not outweighed by the positives of less space to look after day-to-day. Alternative words such as ‘rightsizing’ and ‘my-sizing’ are sometimes used to highlight a slightly different house-hunting mentality, where someone may be willing to move from an old property but only to one where they still have an abundance of space to accommodate visitors or hobbies.
“Just because people want fewer bedrooms doesn’t necessarily mean they want less space,” says Stuart Norton, group design and technical director for Redrow Homes. “We have been taking a much closer look at the downsizer market so that we can make sure our homes fulfil their needs and desires. What we have discovered is that today’s downsizers do want a convenient and stress-free lifestyle, but they still want plenty of space for entertaining – and to be able to take key items of furniture with them when they move from a larger property. So it is important to realise that downsizer homes are not necessarily smaller properties but, simply, ones that are more manageable, easier to maintain, secure, energy-efficient and in locations where everything an owner wants is right there on the doorstep.”
Lack of choice – The National Association of Estate Agents (NAEA) has long reported on the shortage of homes on the market for sale, which combined with the long shortfall of new homes built to meet demand means that potential buyers may not find the kind of property they are looking for in the place they want for the price they want.
Malcolm Booth of Later Life Ambitions says: “Too many houses are not suitable for the needs of the UK’s ageing population. This inflates the price of the few suitable properties but also increases the cost to the taxpayer of health, social care and housing adaptations for older people trapped in unsuitable homes.”
Planning your move
Here are a few ways to ensure you move the right stuff, carefully dispose of the unwanted items and get everything you want to its new home efficiently.
- Plan ahead. Start the preparation well in advance of your move, allowing yourself to do the work bit by bit, which will make tackling overflowing cupboards/wardrobes/filing cabinets with less stress. Maybe set aside an hour or so a day to make progress steadily.
- List your essentials. When going through your possessions, you may find that keeping a written list of those items you really want to keep, but not those you are happier to dispose of. Not recording a non-essential will make getting rid of it that much easier.
- Dispose of the unessential. Particularly in the less sentimental areas of your property – the kitchen and garage, for example – it will be that much easier to write off things you’ll not need at all in your new place. Prepare to rid yourself of unnecessary quantities of things you’ve accumulated over the years, and things such as a lawn-mower, for example, if the management company is looking after the gardens at your new place.
- Don’t just throw it all away. You may be surprised at how many people will be grateful to take possession of something you don’t want – charity shops, hostels, a neighbour or family member perhaps, who might find a use for it. Think about recycling too. Perhaps find an auction house to help you get some cash for a valuable item you no longer want to retain.
- Check room sizes and pre-plan. Make sure you have an accurate floorplan of every room, carefully noting the dimensions and whereabouts of doors, windows, fireplaces, nooks and crannies, storage, electrical points etc. Draw in a draft of where you’re planning to move your furniture. If it all looks too crammed, be ruthless and cull another item from your removal list.
Look forward. Terry Holmes of Beresfords says: “Sometimes families also decide to downsize, perhaps due to a redundancy or divorce etc, here try to remain positive and don’t look at it as a step back, think of it as an opportunity to rationalise and start a different path. Here a good idea is to look at property with space to extend at the back or to the side, which will help you get back that lost space at a time suitable for you.”
- Consider your storage. Does your new home have plenty of built-in storage, and are you taking enough with you? Think about ordering more if you may need it. This could be in a variety of forms to suit different rooms: wardrobes, shelving, beds with drawers, ottomans etc.
- Get another opinion. If you’re having trouble being ruthless yourself, bring in a trusted friend to give their opinion. They can be unemotional about something you may be wavering over and tell you in no uncertain terms that you’ll never need it again.
- Code your removal boxes. Keep it nice and simple for yourself and those assisting you on removal day. A simple numerical or colour code to every box being transferred means that it should be reliably delivered to where you need it, to save you any unnecessary tweaking later.