Astonishingly, recent research has found that people over the age of 55 in England have more wealth in their homes than the annual GDP of Italy.
Age Partnership, retirement income advisors, have found that the equity locked up in English homes belonging to the over 55s stands at around £1.5 trillion – compared to Italy’s £1.4 trillion of GDP. This figure includes 39 percent who have completely paid their mortgage. It is a conservative estimate, however, as a great many people will have significant equity in their homes after decades of repaying their mortgages.
In addition, over the next twenty years, the numbers of over-55s are expected to grow by a third. This indicates that by the year 2036, excluding inflation, the house wealth figure is likely to rise to £1.9 trillion.
Retirement homebuilders have also found that 36 percent of the 65s and over – over 4 million people – are downsizing to smaller homes, with almost 16 percent of those looking to move to the South East of England. The South West, at 10.4 percent, and North West with over 12 percent, are the other two areas with high levels of over 65 year olds relocating to smaller properties. There is, however, a significant shortage of houses to downsize to – particularly bungalows, which are currently commanding a premium of 16 per cent over houses.
In the UK, the percentage of over 60s living in retirement homes or communities (1 percent) is a fraction of that for the same age group living in the USA (17 percent) and Australia and New Zealand (13 percent).
Clive Fenton, the chief executive of McCarthy and Stone, believes that the lack of appropriate retirement provision is down to the Government’s focus on first-time buyers, and that their current policies do not address the lack of suitable retirement housing essential to meet the needs of the UK’s growing older population.
Mr Fenton stated: “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.”
Last month, McCarthy and Stone also reported that the number of reservations for their retirement homes has fallen following the ‘Brexit’ outcome due to a slow-down in the second-hand market, which buyers rely on to sell their homes in order to downsize.
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