Last Time Buyers’ housing wealth to pass £1trillion this year, new report from Legal & General reveals
30 Apr 2018
Last Time Buyers now own £938bn of UK housing stock and will reach the £1 trillion mark this year, according to new research released today by Legal & General, the FTSE 100 financial services group, and Cebr, the economics consultancy.
According to Legal & General’s research, there are now 3.1 million Last Time Buyer households in the UK, with the number of homeowners who have considered downsizing rising from 32% to 39% in the past three years, demonstrating the demand for better later living options for over 55s. Last Time Buyers make up over a quarter (26%) of all UK households over the age of 55.
The UK has a chronic undersupply of age-specific properties, with only 7,000 homes delivered to this sector last year making it the most under-supplied area of the housing market. Legal & General’s research shows that of the Last Time Buyers who had considered downsizing in the last five years but didn’t, 49% said it was because there were no suitable properties available, with a further 29% stating that the properties that were suitable were too expensive.
Phil Bayliss, Head of Later Living at Legal & General, said: “Last Time Buyers account for more than a quarter of the total number of households aged over 55. This report highlights the crucial role they could play in unlocking the wider UK housing market, further demonstrating the need for Government to recognise this sector through key policy changes. If rightsizers were able to move to a property more aligned to their desired lifestyle and needs, vast swathes of homes would be freed up for growing families and second steppers. This, when matched by the huge health benefits proven to come from age appropriate housing, such as a 50% reduction in GP visits and 40% reduction in NHS spend, means that increasing the number of properties available to these buyers is the most efficient way to help solve the UK’s housing crisis and spiralling NHS costs linked to our ageing population.”
Key statistics from Legal & General’s study of “Last Time Buyers” (LTBs) include:
- Last Time Buyers say their optimal age to downsize is between 65-69 – down from 70 in 2015. This is a much more realistic age for rightsizing and shows a greater awareness of what’s involved and the benefits of making it an earlier proactive step;
- The lack of suitable properties is hindering the rightsizing dream. The share of Last Time Buyers who have not been able to downsize due to a lack of suitable properties has nearly doubled from 25% in 2015 to 49% today;
- 45% of LTBs have lived in their home for 30 years or more, and 29% of LTBs still live in the first property they ever bought. Just 17% of LTB households have lived in their property for under ten years;
- 45% of LTB households live in a detached house. 72% of LTB households have no one in full time work (with most of these being retired) and the average weekly income for a LTB household is £632.
- 13% of LTB households said they would want to free up money for retirement from downsizing. The top use of cash released from downsizing is for supplementing a pension.
Phil Bayliss, Head of Later Living at Legal & General, continues: “A large section of our housing stock – worth nearly £1 trillion – is under-occupied and owned by people over the age of 55. It is vital that the over 55s are able to make and act on the choices that are right for them."
A last time buyer is a UK homeowner aged 55 or over living in a house too big for their needs who would like to downsize
Head of Communications
Legal & General Capital
Harriet de Beaufort-Suchlick
Capital and LGIM Real Assets
NOTES TO EDITORS
The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.
LEGAL & GENERAL GROUP
Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with a number of growing businesses in the US. Around fifteen million people worldwide rely on us to help them save for the future and to protect their families and their homes.
We have three main business areas:
- Investing and annuities. At the end of 2017, Legal & General Retirement looked after £58 billion of assets in retirement annuities, for over one million people. We invest these assets to provide returns for our customers and to create value for the business, with over £14 billion invested in housing, urban regeneration, clean energy and small businesses. Legal & General Capital are also involved in investing our own shareholder funds.
- Investment management, where we had £983 billion total assets under management at the end of 2017. We are one of Europe’s leading investment managers, looking after pension schemes and other institutional clients in the UK, US, Asia and other global locations. LGIM are a leading UK workplace savings provider and have a growing UK retail investment business.
Insurance where Legal & General Insurance received £2.9 billion of gross premiums in 2017, providing life protection in the UK for over four million individual customers and two million people in company schemes. We also provide life insurance in the US for over one million people. Our UK General Insurance business offers household insurance, pet insurance and other products.
LEGAL & GENERAL CAPITAL
Legal & General Capital (LGC) is the principal investment arm of Legal & General Group. Investing from Legal & General’s £7.3bn shareholder balance sheet, LGC’s purpose is to generate long-term shareholder value by injecting new capital into key sectors where there has been a shortage of investment and innovation. Focused on Housing, Infrastructure (Urban Regeneration and Clean Energy) and SME Finance, these sectors reflect our aim to invest for the long term in economically and socially useful assets, to secure competitive returns and to create new asset classes for Legal & General’s varied investment requirements, for our partners and for the wider marketplace.
In 2017, Legal & General entered the later living market with the establishment of Inspired Villages Group, marking the first time long term institutional money had entered the UK’s retirement housing market. Later living is an exemplar of a sector that has seen chronic underinvestment. Through long term investment and product innovation, Legal & General has an opportunity to make a positive impact to this underserved retirement housing sector.
Inspired Villages Group is a best in class operator and developer of later living accommodation. Creating safe, secure, social and comfortable village environments in which residents can celebrate the freedom of later life with flexible care arrangements, Inspired Villages offer an outstanding lifestyle choice for people whose existing homes no longer suit their needs.
It is backed by Legal & General and has a total of seven village sites, located in Warwickshire, West Sussex, Devon, Kent, Cheshire and Hampshire. With Legal & General’s long term financial support, Inspired Villages Group will continue to acquire several sites per year. Creating vibrant villages on the edge of and within the UK’s towns and cities, it is looking to build where people want to live, close to family, friends and facilities.
Its philosophy is to create beautiful homes, unique environments and thriving communities that are age appropriate and can support people in making the most of their wellbeing as they move through later life. The Chairman, and vision behind Inspired Villages, is Keith Cockell, who brings decades of experience in the conception and creation of retirement communities across the UK. The senior management team is headed by CEO, Jamie Bunce with the core management team in place to develop and operate a significant number of new communities across the UK in the next few years.