Generation downsize

Young families forced into small homes by rising rents and prices

YOUNG people are four times more likely to downsize than the elderly, according to a survey which lays bare Britain’s property divide.

It found that around 12 per cent of 18 to 34-year-olds expect to move into a smaller home this year, compared with just 3 per cent of over-55s.

The figures confirm how hard it is for young people to move up the housing ladder. They also point to similar problems in the rental sector.

Many under-35s looking to downsize are thought to be tenants in parts of Britain where rents are going up quickly. They are forced to move to smaller properties each year because their wages are not increasing at the same pace.

Other young downsizers may be first-time buyers who cannot afford a mortgage on a home as big as the one they rent.

Leeds is the downsizing capital of Britain according to the survey by savings firm Hargreaves Lansdown, with 16 per cent of people saying they planned to switch to a smaller property within a year. Next on the list is Edinburgh on 12 per cent, followed by Brighton with 10 per cent.

At the other end of the spectrum, in Southampton only 1 per cent of residents are planning to downsize.

Sarah Coles, of Hargreaves Lansdown, said: ‘Generation Rent is being squeezed out of the property market and crammed into smaller and smaller homes.

‘Tenants may be forced to keep downsizing in order to keep a lid on costs. When they eventually buy, they may have to downsize again in some areas to get onto the property ladder.’

Meanwhile many older people have paid off their mortgages, reducing pressure on them to move to a smaller house.

Pensioners may also be staying put because of the boom in equity release. This allows them to borrow money against the value of their house which is not repaid until after they die – meaning it is possible to release a chunk of a property’s value without having to sell up.

The survey found that although few over55s intend to downsize soon, 22 per cent expect to do so at some point. There have been calls for the Treasury to axe stamp duty for retirees, encouraging them to move and free up homes for families.

IF you dream of settling down in a quaint market town, your wallet should be ready for a shock.

Buyers can expect to pay a hefty premium to secure a property in these sought-after locations, a report has found.

Lloyds Bank said the average house price in market towns now stands at £294,772 – an average £30,986 more than homes in the surrounding area.

While Beaconsfield in Buckinghamshire topped the list with houses exceeding £1million on average, the report found that market towns in the north have experienced the biggest jump in prices in the last year.

Ferryhill in County Durham and Seahouses in northumberland saw increases of 23 per cent, followed by Market Bosworth in Leicestershire at 14 per cent.

But despite the rise, Ferryhill is still England’s least expensive market town with an average house price of £96,319, the report based on Land Registry figures found.

Meanwhile just behind Beaconsfield – England’s only million-pound market town – is Henley-on-Thames, Oxfordshire, with homes selling at an average of £ 797,436. Andrew Mason, of Lloyds Bank, said: ‘There are many reasons why homebuyers continue to pay a premium for market town properties – the idyllic surroundings of these close-knit communities make them the perfect place for many.’

Earlier this month it emerged house prices in London and the South East had fallen, while the rest of the UK saw house prices rise 1.4 per cent to an average £227,000. London prices dropped to an average £463,000 in March, down 1.9 per cent on the previous year, while the rest of the South East saw a 0.4 per cent dip to an average £318,000.

This is thought to have been driven partly by a rise in stamp duty tax for the most expensive homes.