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June 1, 2015

Great Britain’s “last time buyer” market worth £820 billion

A new research study released today has quantified the size of Great Britain’s “Last Time Buyer” (LTB) market for the first time. The study found that there are 3.3 million last time buyer1 households across Great Britain, with a combined 7.7m spare bedrooms – equivalent to 2.6 million three bedroom houses.  The study found that properties owned by LTBs are worth a total of £820 billion or 18% of GB’s property market, and is projected to reach £1.2 trillion in value by 20203.

 

The research was commissioned by Legal & General in order to gain an improved understanding of the Last Time Buyers’ property market in Great Britain – older home-owners who live in homes that may now be too large for their needs and who would like to downsize.

 
The study is released at a time when the UK is suffering from a major housing crisis, and helping older home-owners who want to downsize and move to smaller homes could play an important part in the solution – by freeing up more living space for those that need it and allowing older people to access the equity locked up in their homes. A key factor blocking this release of supply onto the market is that there is currently not enough two bedroom properties suitable for older residents to downsize to.
 
Additional key findings of the study:

  •  The typical LTB household lives in a 4-bed house, but wants a 2-bed property
  •  Almost a third of older home-owners have considered downsizing in the last five years; but only 7% actually did4
  •  A majority (58%) of downsizers put off moving home 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.
  •  The most most common preferences for LTBs in a new home are: being close to family and friends (32%), being near their current neighbourhood (18%), have easy access to healthcare (16%) and be located near shops (10%).

 

1 Last time buyers are defined as home-owning households living in under-occupied homes (2 or more spare bedrooms), where the head of the household is over-55 and who have expressed a preference to downsize.

 

2 Calculation based on an average of 2.3 unused bedrooms in LTB homes.

 

3 The calculations for the number of households that are potential LTBs and the types and sizes of properties they own, are based on data from the English Housing Survey (EHS) 2013 micro dataset, Scottish Census 2011, and ONS Census 2011. Cebr estimated the average value of a property occupied by LTBs as well as the total value of housing stock tied up by LTBs using data from the ONS Wealth and Assets Survey 2012 micro dataset. Projections for the future value of the LTB market were developed using Cebr’s regional property price forecasts and demographic projections for each nation. Values are presented in current prices. The analysis for the report was completed in December 2014.

 

4 These findings are derived from a survey carried out by YouGov which provided insights into the downsizing preferences of LTB households in Great Britain. The total sample size was 762 GB adults aged 55 and over, of which 621 were homeowners (owning either outright or with a mortgage). Fieldwork was undertaken between 21st – 24th November 2014.  The survey was carried out online. The figures have been weighted and are representative of all GB adults aged 55 and over.

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