Nearly half of people aged 55 and over are either considering downsizing their homes or have already done it, according to a new study.

Just under a third are considering or expect to downsize, while 15.6% have already sold their home and bought somewhere smaller, the study from the International Longevity Centre – UK (ILC) says.

Make downsizing more attractive

The ILC looks at ways to make downsizing a more attractive option, arguing that it can increase housing choice among older people.

The report, Generation Stuck: Exploring the Reality of Downsizing in Later Life, claims there is a “substantial but unmet demand” for downsizing in later life.

It is calling for the Government to consider focussing its policy on downsizing, instead of solely on first time buyers and starter homes.

By allowing older people to downsize more freely, it can bring more family homes on to the market.

Why do people downsize?

The top reason (56%) for downsizing was that small homes require less maintenance.

Just under a third (29.3%) wanted to downsize as a way to release equity, with 19% managing to release more than £100,000.

Of those who did release their equity, over a third (35.2%) put the money into a savings account while 34% of people aged between 55 and 59 added it to their pension pot.

Moving close to family or friends was also a major reason for downsizing, as was being closer to amenities and public transport. 

On the other side of the argument, there were a number of reasons why people put off making the move including the emotional upheaval, the hassle of moving and the cost of buying and selling homes.

One factor was that there was seen to be a lack of both suitable homes and specialist retirement properties.

Stephanie McMahon, Head of Research at Strutt & Parker said: “The Government has focused a great deal on helping first time buyers in recent years, butmore needs to be done to help downsizers in later life. If we can find a way to allow older people to downsize more freely, more family homes will come onto the market and help to ease the UK’s housing shortage.

"The adjustment of inheritance tax thresholds announced in the summer could also mean that older people with larger homes could be discouraged from downsizing later in life – therefore not freeing up larger family homes that are in high demand and short supply.”