Downsizing: Who gets it right, and how London: Demand continues to rise
2025 Future Homes Standards: Emerging detail
What
Older people are more likely to live alone, in larger homes that are expensive to heat and in need of repair. Why aren’t they moving?
Since Jackson-Stops started tracking enquiries from would-be downsizers just over a decade ago, their numbers have varied little. Given that downsizing is, for the most part, a phenomenon of later life (retired with no children at home) this looks surprising. A big increase in 2022 (16%) tempted us to think change was coming, only for a corresponding fall last year, to reveal that as another postlockdown spasm. This largely static picture accords with national trends. From 2011 to 2021, a million-plus increase in the number of people aged 65+ was effectively matched by a corresponding increase in the number of older households. Some of these will have involved new purchases, but the numbers involved are too high for it to be many. For
the most part, the current 6.9 million older households, are occupied by people who have simply stayed put. Of these:
• 75% are owned outright
• 86% are under-occupied (see panel)
• 62% are poorly insulated (EPC of D or below)
• 15% (i.e. well above average) fail to meet the basic Decent Homes Standard
Owners who downsize, thus stand to benefit from a higher quality, lower maintenance home with lower heating bills and fewer unused rooms. Coupled with, in the Home Counties at least, a typical £400,000 price difference, the incentives look strong. So what is causing older owners to hold back from moving? Talking both to those who have taken the plunge and to some who have not, four key points emerge.
EARLY,
The move here, is as often to outside a school catchment area or commuting zone, as to, say, deepest Norfolk or Devon. Either way, better value makes it easier to get enough space of high quality and low running costs and still have a good nest egg left over. Clients who began planning such a move early – some in anticipation of retirement – say they saw the whole thing not as a chore, but as an exciting start to their ‘Third Age’. That said, it’s
Front cover: Devon £1,750,000 guide (Barnstaple)
Right: West Sussex £1,595,000 guide (Mid Sussex)
noticeably more exciting when it’s financially exciting, too.
Across the country, near-identical percentage differences between average detached and semi-detached house prices ignore a brutal truth: in Sunderland, that difference will be worth about £120,000. In Surrey, it is more
In England and Wales, 69% of homes are under-occupied, including 86% of the homes of those aged 65+. Between them, these 22.5 million under-occupied households have at least 40 million spare bedrooms (ONS 2023). According to Centre for Cities, the UK needs an additional 4.3 million homes, equating to 12 million bedrooms at most.
likely to be £500,000. Even without interest, spending all of such a sum at £2,000 every month, would take over 20 years. Move to a less expensive area (see previous point) and the financial benefit will be even greater. Stay where you are (see next point), and you might hit a different problem.
INABILITY TO SEE SOMEWHERE TO MOVE TO, IS THE BIGGEST DETERRENT
For those keen to stay in the same part of town or village, this is often the obstacle they cannot see past. Suitable properties appear to never come up for sale, so owners decide to wait for the market to ‘free up a little’ which, for reasons explained in the panel overleaf (Vacant Homes), never happens.
Overcoming this gridlock requires a more proactive approach. For would-be downsizer clients of Jackson-Stops, this can involve keeping a watching brief and using longstanding contacts to match buyers with sellers, sometimes cutting out the open market altogether. Occasionally, other options are revealed, such as separating out part of the client’s existing home to create lettable, income-generating accommodation. Where the garden is large enough, the ideal solution might be possible: build the smaller, modern
home you want, on your land. Irrespective of the answer, the lesson here is to consider your options and make plans, not delay.
In the course of our work, we get to meet a great many people who, well into their eighties and even nineties, retain their energy and zest for life. Few, though, would argue that they had more energy a decade earlier. Feeling “unable to face the whole process, even though I should” is a common reason for elderly owners to hold back. Are they right to do so? Much depends upon the original reasons for considering it in the first place and their underlying cause. From our perspective, whether you opt to move or not, making it an active choice, tends to make owners happier in tackling whatever follows as a result.
Opposite page: Devon £1,250,000 guide (Exeter)
Right: Essex £450,000 guide (Colchester)
Below: Northamptonshire £455,000 guide (Northampton)
Downsizers who have made the move, talk of benefits such as convenience and freedom from the worries of maintenance and high bills, along with the pleasure of “things working well” (including basics such as windows and doors). In the end though, most of these come back to money. And where the attraction of downsizing is, at root, financial then, in times of higher inflation, interest rates, energy prices and council tax – not to mention the possibility of so-called mansion taxes – that attraction will only get stronger.
At 676,000, the number of vacant homes (unoccupied for at least six months) in England is often viewed as a shameful waste. In contrast, a recent report from the Home Builders Federation argues that a certain level of vacant stock is essential for market fluidity and that, at 2.7%, England’s is far to low. Across the EU, rates of between 7% and 9% are typical. Indeed, coupled with a number of dwellings per thousand which, at 434, is also relatively low (France has 590, Italy 587), the report concludes:
“This dearth of properties makes England the most difficult place in the developed world to find a home, with the rate of available properties per member of the population at less than 1%, the lowest rate of all OECD countries.”
This lack of visible availability contributes to impressions that suitable properties “never come up”.
*Home Builders Federation: International Housing Audit October 2023
Demand continues to rise as more sellers and landlords enter the market.
The start of the year has seen a flurry of activity, as London continues to attract buyers and landlords looking for a safe place to invest. Mortgage rates have settled in recent months and both buyers and sellers are pressing on with their moves with renewed confidence.
Harry Buchanan, Pimlico Sales Director says, “There is more property on the market than this time last year satisfying the high buyer demand, and as a result our sales numbers are 30% up.” However, discerning buyers are actively avoiding properties that appear to be overpriced and instead, are focusing their attention on quality housing in the best locations that present good value. As demand
picks up pace, our London-wide offices are supporting customers and clients on their property journey, with local knowledge and expert advice. Tim Firth, Weybridge Sales Director, explains the benefits of using an experienced agent. “Many of our clients are very wealthy individuals, moving from or to the private residential estates, so they rely on us to make it happen. We recently managed a property chain of four houses, all moving locally within the area. We worked
out that it takes approximately 150 hours to complete a successful transaction, so we are well versed in the complexities of selling and letting. By offering a personal service and skilful negotiation, we achieve success for all our clients.” Harry adds, “Not only can we support our sellers within the local area we operate in, our national coverage allows us greater scope to make sales happen anywhere in the UK. We recently sold a property in Pimlico, our client was so delighted he sold his country home through our Bridport office and then reinvested through JacksonStops Sherborne. This is how we develop trusted lifelong partnerships, where our clients never need to go anywhere else.” The
for some locations, the combination of living along the river in an idyllic setting, whilst quickly being able to get into the city, makes these markets much more resilient to external influences. Tom Hodgson, Richmond Lettings Director explains, “Because of large businesses based in Richmond such as PayPal and eBay, we work closely with our Corporate and International Relocation team based in Mayfair, who receive hundreds of enquiries every week from major corporations. Towns like these become hubs for families looking for long-term tenancies because of the exceptional schools and lifestyle they offer, making the market busy all year round.” In prime central London, the rents on some of the most highly desirable roads have still not reached their ceiling. Alex McConnell, Pimlico Lettings Director adds, “We recently
Right: Twickenham £3,000,000 guide (Teddington)
Below: Walton-onThames £3,950,000 guide (Weybridge)
re-let a property on Warwick Square, which achieved a rise of 20% in as little as twelve months. We go the extra mile for our landlords, which is why on average they stay with us for ten years. Relying on our commercial approach to maximising rents and minimising arrears and void periods, provides peace of mind.”
In the capital, prices and demand remain strong, and we expect this to continue for
the foreseeable future. Price sensitivity will continue to be a factor, but through guidance and a bespoke marketing strategy, we are confident our sellers and landlords will achieve the best possible price. The service you can expect to receive from our teams is honest and reliable, having navigated every type of market condition over the years. This is why we have proudly received over 2,000 Google reviews with an average rating of 4.9.
Left: Kensington & Chelsea £18,417 pcm (£4,250 pw) guide (Pimlico & Westminster)
Below: Richmond
£4,000 pcm (£923 pw) guide (Richmond)
Let there continue to be light (but no gas)
1 2024 brought the latest proposals and consultation period for new house building standards which are due to be implemented next year (probably June). Some progress has been achieved already via minimum standards introduced in 2022, but reductions of around an extra 40% in energy use, compared with 2013, need to be achieved if statutory commitments are to be met. Such a big cut had raised concerns that major fabric and design changes might be demanded, potentially ruling out features such as large windows and log burning stoves, whilst insisting upon costly ones such as triple glazing and heat recovering ventilation systems. The latest proposals allay such fears
but disappoint those who believe they will fail to meet government objectives as a result.
GLAZIERS AND DESIGNERS HAPPY
A central trend in new home design over the last twenty years or more has been ever-larger windows. Once a rarity, floorto-ceiling glass has become common, often extending up into the eaves of top floors and across the whole rear wall of ground floors, using bi-fold doors to ‘bring the outside, in’. Glaziers, for the most part, are thus breathing a sigh of relief: the minimum standards now proposed do not insist on triple glazing and recognise that, with the best modern systems, more heat is often transferred via
glass. In more modest housing, some of the more extravagant uses of glass might be constrained, but the new rules look more like a tweak, than a re-think.
The consultation document says ‘gas boilers, including hybrid and hydrogenready boilers, will not meet the proposed standards [which are] unlikely to allow the installation of biofuel systems, including wood and manufactured solid fuels’. The key word here is systems: there is no suggestion that this legislation will ban log burning stoves (though air quality rules look set to
urban areas).
The latest proposals disappointed many industry organisations, some 70 of which, under the banner of the Good Homes Alliance and the UK Green Building Council, wrote an open letter to the government to express their concerns. Central to these is that all of the ‘heavy lifting’ is being done by the move to all-electric heating systems, using air source heat pumps coupled with minimising heat loss from stored hot water. Relative to current standards, no meaningful improvement is required in the standard of walls, floors and
Above: Manchester £1,570,000 guide (Hale)
Below: Suffolk £550,000 guide (Ipswich)
roofs. The letter’s signatories believe this will make it unlikely that the government’s own targets will be met. They are also unhappy that carbon embedded via the construction materials and process, lies outside the scope of the consultation (along with biodiversity and water efficiency). Importantly for post2025 buyers, the open letter also cites recent government studies which find that, when higher minimum housing standards are introduced, the costs involved are absorbed through adjustments to land values, without increasing householder costs or limiting housing supply.
The coming legislation is about minimum standards, not what is possible. At higher price levels, many new homes – including most of those pictured here – already exceed the Future Homes Standards. To find out by how much, start by looking at the EPC rating. Then consider the heating system: homeowners with modern heat recovery and circulation systems swear they’ll never give them up. And ask about solar gain via those huge windows, too. Overheating is becoming a big issue and the best designs incorporate shields which both welcome in the lower, winter light and block the higher summer heat. We all like to let natural light in, but you can have too much of a good thing.
Changes in the market, regulation and tax have come thick & fast recently. Here are some most relevant to our clients.
Greater confidence amongst lenders is leading to more mortgage products, expanding options for those buying and refinancing property.
Despite the occasional increase, average rates for fixed term loans have declined significantly since their peak in late 2022. At the time of writing, several lenders are offering five year rates of under 4.5%.
Effective April 2025, this removes an incentive for landlords to favour holiday lets over long-term rentals. Mortgages for the latter tend to be cheaper so, if your timing is right, switching could save on interest costs.
This cuts stamp duty where two or more dwellings are bought together, so its abolition may deter investment in small clusters of terraced houses and apartments. It will increase purchase tax on some houses with annexes.
Higher rate capital gains tax reduced from 28% to 24%, makes selling-up more attractive, but is partially off-set by lower CGT thresholds.
For independent mortgage advice, contact Private Finance on 0800 980 8777 or at jacksonstops@privatefinance.co.uk.
Private Finance is not a tax adviser, nor does this constitute tax advice. Your home may be repossessed if you do not keep up repayments on your mortgage.
www.privatefinance.co.uk
COUNTRY MARKET COMMENT
For all the turmoil of recent months and years, the message for the long-term remains the same: population growth underpins capital growth.
Ahighly encouraging first quarter, with all indicators up on a year ago, suggests that we are now in a period of relative certainty, following the turmoil of previous months and years. Through it all, the ‘big picture’ fundamentals have remained the same. These – irrespective of short-term fluctuations – will ensure that underlying capital values continue to grow.
Focusing, as we all tend to, on the short term, it is clear that the residential market has at last emerged from the dark days which followed Liz Truss’s infamous ‘mini budget’, prior to which it had barely recovered from the extremes of the covid lockdowns. Since the start of this year, Jackson-Stops offices across the country have seen indicators such as numbers of market appraisals and sales agreed, all move into positive territory. They include one in particular – an increase in ‘lifestyle buyers’ – which was notably down in 2023. These are wealthy buyers, most often based in London or Manchester, who are looking for an additional home, in the country. Theirs is not an essential purchase hence, last year, uncertainties over interest rates and, in particular, long-term corporate attitudes to working from home, prompted many such buyers to put their plans on hold. Now, with caution, they are returning.
We are not as far as it might feel from the heady days of early 2022. Talking recently to a couple who bought their quite large Suffolk house at that time, they said “We knew we were paying a few percent over the odds, but it was a calculated risk. We had a loan fixed at under 2% and figured we should be able to save enough, to pay off a fair chunk of it by the time the rate came up for review. And it got us the house we really, really wanted.” Cheap money enabled this couple to prioritise the right house, ahead of the right price, at a time at which prices had risen by around 25% over the previous three years. Today’s buyers aren’t quite so fortunate. With borrowing rates two or three times higher,
they are much more constrained. Hopes were raised by industry forecasts that prices would decline by more than 10%. In reality, prices have softened, but not that much (5% is more typical) and are now hardening again, contributing to a persistent ‘value perception gap’ between buyers and sellers. That gap is closing as the stability of present circumstances becomes more apparent. Further base rate adjustments are expected to be small and probably downward, not least as the effectiveness of interest rates in tackling inflation, is questioned (see panel ‘Occupation by Tenure’). The outlook for salaries, bonuses and capital growth also looks positive, if similarly lacking in drama. This relative calm allows buyers to appreciate
the underlying market forces, underpinning both their confidence and their caution.
A second home is a luxury; a home, is a necessity. When demand exceeds supply, the question which confronts most buyers is thus not ‘What do we want?’ but ‘What can we afford?’. This is why interest rates matter so much in the short term: along with the price of other essentials, they dictate what we can afford. It’s also why interest rates make little difference in the long term: when there is surplus demand, prices will always revert to the maximum at which enough people can afford the limited number of homes available.
Left: Kent £1,700,000 guide (Sevenoaks)
Below: Surrey £3,850,000 guide (Oxted)
Sources: Land Registry, ONS, United Nations, Jackson-Stops.
NB: non-inflation adjusted, hence high percentage fluctuations in earlier decades, appear minor.
Just 1.4 million households (5.6%) have a variable rate mortgage.
Sources: ONS, UK Finance, Jackson-Stops.
Like a tide rising over many decades, the UK population continues to grow. The latest forecast is for an extra six million people by 2036, to over 73 million. Also for decades, our population has increased faster than the provision of new homes, progressively increasing surplus demand and raising the bar for typical first time buyers to purchase an average property. One income used to be
enough, then two. Repayment terms were always 20 or 25 years, now more than 50% of new loans are for 30 years or more. Cash from the ‘Bank of Mum & Dad’, once a great rarity, has become normal, as enough buyers have parents who, via this very process (which also attracts property investment cash from overseas), have surplus equity to make available.
It is now increasingly hard to see where else even the most resourceful buyer could turn, to find the next, short term competitive advantage. This time, perhaps, we really have reached the limits of affordability. If so, capital gains in the coming months are likely to be modest, even as, for the same reasons and at all levels of the country house market, real capital values remain rock solid.
Of course, the political event of the year will be a general election, which often prompts inaction. Not this time. The outcome appears, amongst our clients and buyers at least, to have been assumed, the consequences discounted (financially speaking) and the decision taken. They will carry on as before, because it will make little difference; no new government will, or perhaps can, turn the tide. At least until the wisdom of those assumptions is tested for real, the positive, if undramatic current market conditions, should prevail.
A Special Correspondent with BBC News, Fergal is internationally recognised as a leading journalist and authority on world politics and current affairs. His numerous awards include an OBE for his work in Africa, a BAFTA, an Emmy, the George Orwell Prize, a Sony Gold award, Overall Winner of the Amnesty International Press Awards and Royal Television Society Journalist of the Year.
I have lived in many places. As the child of restless people, I moved frequently. From a flat in Camden Town – I was born in London – to a bed and breakfast in Dublin, and from there to a council estate, and then, as my parents’ work began to flourish I moved to the first house they owned, a red-brick Victorian in a sedate Dublin suburb whose avenues James Joyce had once strolled as a boy. Then came my parents’ separation and we lived for a while in a flat in south Dublin, and from there on to Cork where I lived with my grandmother in a house built by my grandfather in the years before the Second World War. It was covered with ivy and there were apple trees in the garden, and a shed filled with brica-brac: old fishing lures belonging to my uncles, a cricket bat, a rugby ball from which the air had long vanished; the place where I smoked my first cigarette and dreamed of a date with the lovely Bríd White who lived just a garden away. This is the house where I was happiest then, a place of refuge from family discord, the warm presence of my grandmother, the rock on which all certainty was founded.
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SINCE 1910
In my teens I moved to a large early Victorian pile
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on the slopes of Montenotte overlooking Cork city, where the cream of the city – rich and thick – had built in imitation of the villas of their Italian holidays. Then so many other roofs and rooms. Limerick. Belfast and a terraced house on Carmel Street in the Troubles, with the drums of the marching Orange parades and the army helicopter beating a disturbed tattoo across the city. A faux hacienda in South Africa behind high walls and an electric fence; late nights listening to gunfire from the black township across the highway, fearful of sounds in the early hours. And Hong Kong in that spacious flat on Jardine’s Lookout, the place where I first walked a midnight floor with a crying baby. To London and Chiswick, and then across the Great West Road to Grove Park, and then a hop to Barnes, and the start of a long love affair with the easy going green spaces of the city’s south-west. But home? Home is where my loved ones are. Beside me. Inside me. Across the city, or the seas, and back, a long way back into the past, the arms of those who held me and guided me whatever roof I lived under. Home is all the love I have known, still know.
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