The Council of Mortgage Lenders claimed that there are too few properties for older people to move into, causing issues further down the chain.

Many older borrowers would move to bungalows and smaller properties but feel that they cannot leave their current home as there is little incentive to move.

The high demand for smaller homes means prices are high while the transaction costs were also highlighted as a reason not to move.

The trade body criticised the coverage of the issue in national newspapers, who suggested that some older homeowners could be forced to sell in the future.

It said: “The real debate is about how to address the current lack of (perceived) choice for older home-owners who would like to move, but feel they can’t. No-one, as far as we know, is suggesting that older home-owners should be forced or guilt-tripped into doing anything they don’t want to.”

It said many firms including Saga, Legal & General and Age UK were working to highlight the issue and pressure government into taking action.

Age UK recently stated that ‘we are not building enough of the right type of retirement housing to tempt older people who might wish to’.

It added: “Creating innovative models of housing with an integrated approach to services would make it easier to offer a wider range of housing choices while also boosting local housing markets, freeing up family housing and creating employment.”

The Council of Mortgage lenders said there needed to be more ‘opportunities for older households to downsize, promoting more efficient use of the housing stock’.

The trade body added: “Getting anywhere with this big issue is unlikely to come from any focus on division and conflict. It’s going to come from having a calm, rational debate about housing supply and use, and perhaps from some “nudge economics” to tip the balance of behaviour in ways that help to widen choice, not narrow it.”