Last-time buyers to hold property trillions
Research conducted by Legal & General and CEBR showed that the value of last-time buyer homes will increase by 50% in the next five years.
These are currently held by the 3.3 million homeowners aged over 55 who would potentially be willing to downsize.
These properties are currently worth some £820bn, the report said.
In the next five years around half a million more households are expected to be purchased by ‘last time buyers’, bringing the total figure to 3.8 million by the end of the decade.
The CEBR expects property inflation to reach 3.4% in 2016 and then 4.4% the following year. By 2020 the average price of a home is expected to rise from £261,000 to £321,000 – a 23.1% rise.
Lack of supply will help push house prices to this new high, although some last-time buyers will be left unable to downsize because of a lack of suitable properties.
Nigel Wilson, group CEO of Legal & General, said: “Last Time Buyers are set to receive a massive boost to their home equity over the next five years, taking the overall value of their homes well past the £1tn mark. However, a lack of suitable properties for them to downsize into is in turn effectively cutting off the supply of sufficient homes for families in the UK.
“If we are able to help older people in Britain move to homes which better fit their lifestyles and their needs we will in turn unlock large swathes of valuable housing stock for growing families.”
He added: “We need to make it easier for older people to even consider moving by relieving the onerous burden of stamp duty, creating better options for equity release and providing real alternatives for older people in terms of the types of home that they can live in and the infrastructure that surrounds them.
“If we are able to get this right we will help older people in the UK move to homes which better fit their lifestyles and their needs and at the same time unlock large swathes of valuable housing stock for growing families.”