The UK housing market is failing to meet the needs of thousands of older householders, the so-called squeezed middle who cannot afford to downsize into an open market retirement property.

The open market provides housing for older people who have sufficient wealth tied up in their existing homes to allow them to downsize. Around 40 per cent of all older households could afford to downsize and have a minimum of £50,000 left over to supplement their pensions.

At the other end of the scale, social landlords provide for the least well-off, offering rented, often sheltered homes for older people. Such accommodation accounts for the needs of around 35 per cent of the elderly population, although much of this accommodation needs updating.

But what of the 300,000 households that fall between the two? Savills estimates that the over 65s hold around £1.5 trillion in housing equity, around 43 per cent of all housing equity in the UK – the problem is that it isn’t evenly distributed. Homes within new build retirement developments are typically priced in the upper quartile of the flat market, putting them out of reach of many aspiring downsizers.

This creates a squeezed middle which accounts for 25 per cent of all over 65-year-old households that own their own home, but have insufficient equity to downsize into an open market retirement property.

These householders more often than not remain in their existing homes and only move into sheltered housing if health or financial pressures force them to. Savills research estimates that there are some 560,000 sheltered rented homes for older people across the country, with demand for just 420,000.

However, this is not a simple story of oversupply – demand outstrips supply in many markets. In urban areas, such as Birmingham and Leeds, for example, demographic changes have seen older residents move out of the cities to larger homes in the countryside. Markets such as the New Forest, Sheffield, and St Albans all have needs that outstrip supply.

Savills believes there is an opportunity for social landlords to consolidate stock and create homes that are more attractive to older households and more financially viable long-term for operators. One solution could be a new shared ownership product that would allow households with less equity to downsize to more suitable accommodation, yet still have substantial cash left over from the sale of their home.

Savills has mapped the potential demand for shared ownership homes, from over 65 households across Great Britain, from those with the means to downsize and buy shared ownership but not market housing, see below. Locations such as Leeds, Glasgow City and Wiltshire each have over 4,000 such households.

Further information

Read more: Housing For Older People