Rightsizing: the opportunities in the downsizer market for housebuilders

Executive summary

• Ongoing buyer demand for larger homes and rising house prices have put would-be downsizers in a strong position to make a move to a smaller home and release equity to realise a new lifestyle or help children move onto the housing ladder.
• Downsizing doesn’t necessarily mean moving to a one-bed flat. Our analysis of reservations data over the last 18 months shows almost half of buyers aged over 55 elected to reserve a 3+ bed new-build house, while 27% of buyers looked to move to a 2- bed new-build apartment.
• On average, those looking to downsize from a 4+ bed home to a three-bed property in the same area, who own their home outright, can expect to release a windfall of £200,000 before costs.
• The largest potential equity release from downsizing is for homeowners in London and the surrounding commuter belt, where down-trading from a 4+ bed to a three-bed home can release double the UK average at £424,000.
• There is a clear opportunity for housebuilders who engage with this equity-rich audience. The population of those aged over 55 is set to increase by 1.7 million over the next five years.