Downsizers willing to move but held back by lack of stock - Savills

A lack of stock and emotional attachment are the biggest constraints stopping homeowners from downsizing, research suggests.

Analysis by Savills found half of downsizers have owned their home for more than 20 years and three quarters for more than 10.

The research found that while a net balance of 52% are planning to move in the next one to two years, there are still stumbling blocks to freeing up supply.

When downsizers and empty nesters were asked what is holding them back from moving, a lack of suitable stock was the main reason,  cited by 35%, emotional attachment was a close second (28%), ahead of financial considerations (14%).

Among downsizers and empty nesters looking to move, 16% said ‘the memories they made’ in the home was the thing they would miss the most, coming in second behind the location (39%).

Savills’ survey of almost 2,000 buyers and sellers probed feelings about moving home. When asked what was the driving motivation behind moving, lifestyle factors are revealed to be the most important to downsizers and empty nesters. Almost half (48%) hope to ‘right size’, looking to live in a more manageable sized property, while a quarter (24%) are seeking a lifestyle change.

Releasing equity to fund retirement, or to help family members was a top priority for almost one in five (18%) downsizers and empty nesters surveyed. 

This comes as 164,000 first-time buyers are expected to receive family assistance in getting their mortgage in 2023, according to latest estimates from Savills research.

According to the Savills survey findings, the desire from first-time buyers to connect to a property is strong. When asked what aspect of their move they are most excited about, almost half (47%) were most excited to have somewhere to call their own and older family members show increasing commitment to helping them.

Frances McDonald, director of research at Savills, said: “Those looking to downsize or move on from long-term family homes are in a strong position in today’s market, many having benefitted from the strong house price growth of the past 20 years.

“Many in this cohort are likely to become cash buyers when they sell their family home, and are therefore less exposed to the concerns around rising interest rates. This means they place a greater significance on the emotions of moving, as opposed to the financials.”

It comes as serial property entrepreneur Giles Mackay’s Outra data science and artificial intelligence brand has launched a new Pre Mover Index, which claims to detail those most likely to move in the next six months.

The median age of those tipped to move home in the next six months has surged 3.5 years in just 12 months amid signs younger households are being paralysed in their efforts to move home.  That leaves the median age at 525 years-old, from 49 years-old last year, the data suggests.

The analysis supports a growing body of evidence that suggests a wealthy tier of UK households are moving to free up cash or make major life changes in later life. The age and wealth profile fits with anecdotal evidence than many moving house are doing so to release equity to fund retirement or to pass funds to their children to help them onto the housing ladder. 

Mackay said: “The UK’s housing market is now the preserve of the old and rich, and while a boom now will be welcome news to those involved in the day-to-day transactions given fears of a slowdown, there’s a real danger that what this trend indicates is the start of an inheritocracy.

“Retiring boomers may be looking to move to a house in the country, seek a new life abroad or downsize and pass on that wealth to their millennial children who otherwise would not be able to get onto the ladder.

“However, that risks creating an unfair UK house market where those without the Bank of Mum and Dad are locked out of a system where prices are artificially buoyed by generational wealth that has been created passively due to the housing boom over the last three decades.”

Households with significant stored equity make up an ever larger proportion of those forecast to move compared with the rest of the population. Those with more than £250,000 of stored equity now represent 52% of those most likely to put their house on the market, compared with 34% a year ago.

Stored equity now appears to be more influential than household income level when moving house, analysis shows, with those earning more the £50,000 a year only marginally more (35.5% of the total) empowered to move than this time last year (30%). 

The index predicts the likelihood of households moving home or putting their house on the market for rent within 6 months. 

Detached houses make up a third [37%] of those, the biggest single category. That compares with around a quarter (27%) last year. 

The likelihood of those in semi-detached houses to move rose slightly (from around 28% to 30% of the market) while the likelihood of those in terrace dwellings to move fell