The high cost of homes in the UK to both buy and rent is forcing young people into smaller rented properties, new research shows.
Indeed, the analysis by financial firm Hargreaves Lansdown suggests that 18 to 34 year olds are four times more likely than elderly people to downsize their property.
The firm say that its analysis reaffirms just how difficult it has become for the younger generation to progress up the housing ladder, with 12% of young people expecting to move to a smaller sized home this year compared to just 3% of those aged 55 and over.
Meanwhile, the research also highlights similar problems in the rental sector, as tenants aged under 35 who are renting in areas with rapid price growth are most likely to be seeking to downsize. This trend is attributed to rent growth outpacing wage growth.
The survey’s findings also point out that many older people are mortgage-free which makes them less likely to need to downsize for financial reasons, whereas first time buyers may be forced to downsize if they transition from renting into home ownership.
Additionally, the rise in popularity of equity release schemes has also provided pensioners with another means of staying put, with just 22% of over-55s stating that they intend to downsize at some point.
A further breakdown of the data shows that Leeds is the place where the older generation are most likely to downsize within the next year, with 16% confirming plans to do so. Leeds was followed by Edinburgh and Brighton at 12% and 10% respectively. By contrast, just 1% of over-55’s in Southampton planned to do the same.
‘Generation Rent is being squeezed out of the property market and crammed into smaller and smaller homes. ‘Tenants may be forced to keep downsizing in order to keep a lid on costs. When they eventually buy, they may have to downsize again in some areas to get on to the property ladder,’ said Sarah Coles of Hargreaves Lansdown.