New plans are needed to encourage those with spare bedrooms ‒ usually older homeowners ‒ to downsize.
One of the big housing issues that are lying under the surface at the moment centres on spare bedrooms that are going unused.
According to census data from the Office for National Statistics, there are around 8.9 million homes in England and Wales which have at least two spare rooms.
On top of that, a further 8.3 million properties have one spare room.
To break that data down further, it means that in 2021 there were a frankly incredible 26 million spare bedrooms in properties across the UK.
What’s more, it’s becoming more common. Back in 2011, at the time of the last census, there were 24.2 million spare bedrooms in properties in England and Wales.
In other words, almost two million additional bedrooms have essentially been moved out of the housing market in the last decade.
Who owns those spare rooms?
The obvious question here is who has the properties with all of these spare bedrooms?
The finger tends to be pointed at older homeowners on this one.
According to last year’s English Housing Survey, almost 80% of older people are homeowners, while the number of people falling within the 65+ demographic is on the rise.
By contrast, younger people are increasingly finding it harder to get onto the property ladder in the first place. In fact, the average age of a first-time buyer today is above 30 in every single region of the UK according to Halifax, topping out at 33 in London.
There is a real regional contrast, too.
More than half (54%) of the households in Rutland in the East Midlands have at least two spare bedrooms, while other areas with lots of homes with spare bedrooms include the likes of the Cotswolds and Hart in Hampshire.
The rising cost of housing
The housing market in the UK hasn’t been in the healthiest shape for some time now, certainly, if you’re hoping to get onto the ladder, or even move up it.
The rate at which the value of our homes has increased has been little short of stunning.
For example, according to figures from the Office for National Statistics, in the last year alone the average property value has grown by £33,000 to £296,000.
To put that into context, back in January 2011 the average home was worth £167,300. That’s a mind-boggling growth in a decade.
And the driving force behind that growth has been the fact that we don’t have enough homes to meet demand.
For years, any time the Government has tried to give the housing market a boost, it has focused on measures that further increase demand ‒ Stamp Duty holidays, the Help to Buy scheme, mortgage guarantee schemes aimed at pushing more lending at 95% loan-to-value, to name just a few.
As a result, while the same old shortage of supply remains, demand for housing is constantly pushed upwards, and with it so too go the values of our homes.
Why are there so many spare bedrooms?
What seems to be happening is that people have bought homes that suited them when their families were bigger ‒ the kids were still young and living at home, and so all of the bedrooms were in use.
However, as the children move out, the older homeowners aren’t downsizing, instead sitting on those larger properties for longer.
There are plenty of reasons for this. In some cases, they need to keep those rooms, for example, if they are going to play an active role in the childcare of any grandchildren. Others might have medical reasons for needing extra space.
But, for plenty of homeowners, they aren’t downsizing because it doesn’t make sense for them.
The properties which may suit their needs as they get older are either not available, or are out of their price range.
For example, bungalows are a popular option for older people since they no longer have to worry about stairs.
Yet these properties have seen prices grow even more rapidly than other property types ‒ by 10.5%, compared with 6.3% for other homes, according to Rightmove.
If you are downsizing, you are going to want to have some extra cash left over from the sale in order to support you in retirement, particularly if you don’t have much in the way of pension savings.
However, if you’re paying a massive premium for a bungalow, then that will eat into that money, making the whole idea less appealing.
It’s not just the cost either.
All too often new developments are aimed at meeting the needs of young buyers, which is obviously welcome since they need a boost getting onto the ladder, but unless we build more homes which are suitable for older people then they simply won’t downsize, meaning ever more bedrooms lying empty.
There is also the option for Government action to encourage more older people to downsize.
That could be achieved by tweaking the Stamp Duty regime for example, or even Council Tax, to act as a carrot (or stick) to push those with spare bedrooms to sell up.
After all, we have already seen the ‘bedroom tax’ introduced in order to tackle the issue in the council housing sector, and such an approach might help with the private housing market too.