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Last-time buyer numbers double as life expectancy rises

Joanna Faith
Written By:
Joanna Faith

The number of so-called ‘last-time buyers’ has almost doubled in a decade, a report has revealed.

One in three – or nearly 200,000 – home movers are over-55 and growing numbers are using their equity reserves to find their perfect last home, according to the Intermediary Mortgage Lenders Association (IMLA).

The report found that between 2010 and 2017 older homeowners were predominantly using cash to buy new homes. 

Each year only around 2.5% of the eight million older homeowners in England move. But as the cohort of over-55s swells faster than all other generations over the coming decades, more people will seek to make one final housing transaction, IMLA said. 

Cash buying under the radar

Most older homeowners (63%)) own their property outright, and they account for the bulk (84%) of all outright owners, holding a disproportionate share of housing equity – £1.8trn out of a total £2.6trn.

Much of this equity is likely fuelling LTBs. In 2016/2017 LTBs in England accounted for nearly all of the moves (132,000) by outright owners (138,000), which were up 20% overall since 2006/2007 (115,000).

This indicates that most LTB activity, and much of the growth in that activity, was cash-financed, a phenomenon which has remained relatively hidden as market analysis tended to focus only on mortgage transactions.

Increased life-expectancy driving demand

Kate Davies, executive director of IMLA said: “Our increased life expectancy and growing number of people aged 55+ means that, far from being a niche sector, the number of LTBs in England has doubled within a decade. It’s clear that there is much appetite among older homeowners to move into a property better geared to their needs in later life. 

“It is curious that house-builders appear to have been slow to recognize what could be a sizeable market for a variety of designs that combine practicality, low maintenance and energy efficiency.  Retirement developments aimed at senior citizens have their place, but they’re not appropriate for everyone. 

“We have already seen considerable financial innovation around mortgages into retirement, lifetime mortgages and retirement interest-only products. But there is much more that could be done in fostering LTB schemes, whether these are bespoke equity loan deals, shared ownership schemes or entirely new arrangements.

“It may also be time for the Government to address this LTB policy blind spot and begin to work more closely with the lending and house-building sectors to kick-start activity, much as it did for first-time buyers with its Help to Buy initiatives.

“We see huge opportunities for the housing and mortgage sectors to better serve the interests of older homeowners over the coming years, and in ways that promote their lifestyle and well-being, as well as the wider health of the housing market.”