A new report reveals £62bn in equity could be freed up across London if retirees downsized from mortgage-free family homes – reinforcing the need for new approaches to retirement accommodation across the capital.
As the London Councils Housing Conference gets underway today (March 7), latest projections indicate the number of retirement households in the capital as increasing by at around one million by 2030 – with two million retirees expected to be living in London by 2050.
The report – commissioned by developer Elysian Residences with research undertaken by Dataloft – shows that over the next 30 years London faces a boom of older people needing to downsize from family homes into retirement accommodation – the so-called 65+ Later Living Market.
Should they be able to do so, the report says some £62bn in equity could be freed up in large family homes occupied by just one or two people.
Gavin Stein, CEO at Elysian Residences, said the report represented the first detailed analysis of London’s the later living marketplace with lessons that could be applied UK-wide on a range of issues including equity release, unused space in existing properties, the leading locations with downsizing potential, running costs, and the key benefits of purpose-built later living developments.
“This report sheds new light on how later living residences can help people to truly enjoy their later years,” Stein said.
In London, there are currently 750,000 retirement households containing some 1 million retirees – 65% of which are owner occupiers.
The report says these households – 175,000 family homes across the capital – could downsize into purpose-built later living apartment schemes.
According to the report, London’s top five boroughs with the highest quantities of mortgage-free family homes and retiree households are – in rank order – Kensington & Chelsea, Westminster, Barnet, Bromley and Camden.
- Kensington and Chelsea is said to have £5bn under-utilised space and equity
- Westminster – £3.9bn worth and unused household space averaging £1.7m
- Barnet – £3.8bn and unused household space averaging £361,000
- Bromley – £3.5bn and unused household space averaging £252,000
- Camden – £3.3bn and unused household space averaging £1.2m
Other addresses in the top 15 boroughs include Richmond upon Thames (£3.2bn and unused household space averaging £452,000); Wandsworth (£3bn, £588,000); and Harrow (£1.9bn, £267,298).
There is currently a huge undersupply of purpose-built premium retirement accommodation in the UK, with just 1% of the UK’s population live in designated retirement schemes, compared to 17% of Americans and 13% of Australians
Retiree numbers in the UK overall are currently forecast to grow by 59% by 2030, four times the rate of growth of the working age population.
Retirement-home developers are building and launching new later living schemes across London & UK to meet the forecast demand with the current generation approaching retirement having been owner occupiers for the past 40 years.
Over the next 12 years alone, there is expected to be a demand for 69,000 extra Later Living homes.