There has been a common story since the pandemic took hold: of buyers moving out of crowded urban areas into suburban or more rural spots in search of more space and bigger gardens.
This year has seen the highest numbers of people downsizing for five years, yet these buyers would typically move to smaller homes that are closer to amenities. So, how has Covid changed how and where older generations want to live?
First, we need to give some context. We define downsizers as buyers purchasing a home for a minimum of 20% less than the home they are selling and gaining at least two fewer bedrooms – something that is typically done from the age of about 55 onwards.
And it’s important to note that downsizers have been inclined to stay put over the past decade, a factor that has underpinned the long-term decline in cash buyer numbers. The proportion of these buyers as a share of all purchasers has dropped from 20.2% in 2012 to 12.1% in 2020 and 2021.
However, this year has seen a significant increase in the actual number of downsizers, who have been spurred on to move by the strong housing market and the stamp-duty holiday. Their numbers have risen from a low of 123,500 in 2020 to 181,100, the highest figure since 2016.
Crucially, those who have moved more recently are defying the granny flat stereotype and choosing larger homes than before. In 2012, 43.5% of downsizers traded down from a house to a flat, but this year the vast majority of these buyers picked a house, with only 30.4% purchasing a flat. Nevertheless, it is the case that the later in life someone downsizes, the more likely they are to opt for a flat.
For most people, downsizing is a once-in-a-generation move with many people in this bracket stepping down from the family home in which they have lived for 25 to 30 years. Downsizers are most likely to be selling detached homes – these accounted for 59% of all properties sold by downsizers this year – followed by semi-detached houses (25%) and terraced properties (11%).
In 2021, downsizers sold homes costing an average of 51% more than the purchase price of their new home, equating to a typical cash difference of £256,800. As well as freeing up equity, the average downsizer moved from paying Band H council tax to Band C, an average reduction of over 50%.
Buyers across the board have moved bigger distances since Covid began and downsizers are no exception, although the magnitude of their move and push factors such as poor health or finances means they have always relocated further than the average purchaser.
In 2012, for example, downsizers moved an average of 3.1 miles, compared to 2.4 miles for everyone else. Yet this gulf has widened with time and this year downsizers moved a record 4.7 miles, 34% further than the average buyer, and 52% further than they did a decade ago.
In terms of where they are going, the South West of England is the downsizing hotspot: this year, those trading down have accounted for 14.3% of all purchasers in the region. The East of England comes next (12.2%), followed by London (11.2%). By contrast, the North East has seen the fewest downsizers: they have accounted for only 5.8% of purchasers in 2021.
