London retirees are sitting on £62 billion-worth of under-utilised property, new research has revealed.
An independent report on the growing “later living market” found that many large, mortgage-free family houses, occupied by 1-2 retirees are putting a strain on the London housing market.
Some 65 per cent of retirees are owner occupiers and these households, potentially 175,000 family homes across the capital, could downsize into purpose-built later living apartment schemes, releasing significant equity for lifestyle, healthcare support and inheritance benefits.
The report reveals London’s top five boroughs with the highest quantities of mortgage-free family homes and a significant number of retiree households.
In rank order, these are Kensington and Chelsea, with £5 billion worth of under-utilised space and equity, with the average retiree property containing £2.1 million worth of unused living space, typically two floors of redundant bedrooms; Westminster with £3.9 billion worth and unused household space averaging £1.7 million; Barnet with £3.8 billion and unused household space averaging £361,000; Bromley with £3.5 billion and unused household space averaging £252,000 and Camden with £3.3 billion and unused household space averaging £1.2 million.
Other addresses in the top 15 boroughs include; Richmond upon Thames with £3.2 billion and unused household space averaging £452,000; Wandsworth with £3 billion and unused household space averaging £588,000 and Harrow with £1.9 billion and unused household space averaging £267,298.
Despite the significant size and wealth of this ‘family house downsize to later living’ sector, the report says that there is currently a huge undersupply of purpose-built premium retirement accommodation in the UK. Just 1 per cent of the UK’s population live in designated retirement schemes, compared to 17 per cent of Americans and 13 per cent of Australians.
In London, there are currently 750,000 retirement households containing some 1 million retirees. Retiree numbers in the UK overall are currently forecast to grow by 59 per cent by 2030 which is four times the rate of growth of the working age population. The report shows that the number of retiree households in the capital is due to increase to 1 million by 2030, which assumes that the proportion of retirees in purpose-built retiree housing will rise from the current 1 per cent to 8 per cent, meaning there will be a demand for 69,000 extra later living homes over the next 12 years. By 2050, there will be two million retirees living in London, double the current population.
Gavin Stein, Chief Executive Officer at Elysian Residences, comments: “This comprehensive new report, undertaken for Elysian Residences by Dataloft, is the first detailed analysis of the later living marketplace in London and the UK. It provides an authoritative insight and thought leadership into 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.”
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