(Bloomberg) -- One of Britain’s biggest mortgage lenders called for ministers to use financial incentives to persuade older people to downsize and free up millions of properties.
Barclays Plc said grants and vouchers to reduce the cost of moving for people stuck in properties that are too large for them could help unlock capacity in the country’s supply-constrained housing market.
Stamp duty and legal costs often persuade people not to move, with the bank’s analysis finding that 85% of owner-occupied homes in England and Wales are “under-occupied” — containing one or more spare bedrooms. These properties are not just owned by retirees but also by many people aged over 45 whose children have left home.
The findings suggest that Britain has an untapped capacity that could help resolve the housing crisis. While successive governments have focused on building homes for younger people struggling to get onto the property ladder, there is a need for more suitable homes for older generations.
Barclays estimates that 3.8 households could be lured into moving to properties that are the right size, allowing younger families to find appropriate housing.
“This segment is not the be-all and end-all, but it is potentially a blocker that you could encourage to move that would allow more movement through the market,” said Mark Arnold, head of mortgages and savings at Barclays.
“Everyone focuses on first-time buyers rightly, but no one focuses on this later life segment or this plus 55 segment who have a different need, which is different to first-time buyers,” he said.
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