Low Fell OAP retirees have to make tough choices with the onset of the cost-of-living crisis.
Growing inflation, unpredictable financial markets and the high cost of living mean many former retired Low Fell people are returning to work in what has been dubbed the ‘great unretirement’. Some are even bringing forward their downsizing house move.
Looking at the changing job market, July saw the most significant month-on-month rise in OAPs working since records began in the 1990s when 1 in 23 of all the UK’s OAPs went back into employment.
That now means ….
890 Low Fell (NE9) over 65s are in gainful employment
(i.e., 1 in 8 of them).
As a backdrop, the number of working 65-year-olds and above has been increasing since the mid-nineties when 383 Low Fell OAPs were employed. Yet, July's figures were the largest monthly jump on record by quite a distance.
Looking at the changing property market, I have been speaking to many Low Fell OAP homeowners who are having to bring their downsizing plans forward several years to survive the cost-of-living crisis. The money generated from the downsizing will cover their housekeeping and massive energy bills.
So why would someone want to downsize? Mostly, their homes are too big for their needs as their children have flown the nest decades before. The government classifies a property as under-occupied if it has two or more spare bedrooms.
How big is the under-occupation issue in the UK?
Of the 4.52 million British homes owned by those aged 65 and over, 3.04 million have at least two spare bedrooms (i.e., under-occupied). Looking locally…
13,954 of the 33,998 OAPs in the Gateshead area have two or more spare bedrooms.
You might ask why this is important.
Well, to start, it's holding back Low Fell families that need the bedrooms and space these larger houses offer if the older occupants won't move on. Also, these larger homes cost more to run in terms of energy bills and other things such as building insurance and council tax.
From October (even with the recent energy bill cap) it will cost on average £354 per month in gas and electricity alone for a large Low Fell 4-bed detached home (where occupants are home all day).
So why are there so many mature homeowners in their 70s, 80s and even 90s still living in houses that are too large for their day-to-day requirements? There are several reasons for this. One is the obvious emotional attachment to the family home they have often owned since the 1970s and 1980s. The second is to escape the hassle and costs of the house move, and finally, the small number of suitable Low Fell properties for them to buy to attract them to make a move.
The growing energy bills have provoked many of those mature Low Fell homeowners, who maybe can’t or do not wish to get a job, to re-evaluate their home life strategy. I am seeing an ever-increasing number of mature Low Fell homeowners downsizing (or, as I prefer, rightsizing) to diminish their monthly expenditures.
So how much could mature Low Fell homeowners gain by downsizing?
The numbers are intriguing when looking at the average difference between the sale price and the subsequent purchase price of the average downsizer.
Low Fell downsizers could unlock an average of £65,740 per household.
Not only will Low Fell homeowners earn this lump of cash for their extended retirement, but they will also save themselves around £163 per month in lower energy bills, buildings insurance and council tax bills.
So, what are the options for mature Low Fell homeowners?
Waiting 12 months to make a move might mean you are putting your Low Fell home on the market as every other OAP homeowner puts their home on the market, meaning the dynamics of the local property market will probably be a lot different. Thus, the equity you release on the downsize could be much lower.
Yet some of you will be worried about finding your next home. Not to worry.
At our agency, we do things differently than many other Low Fell estate agents. We can find you a buyer, then put everything on ice and go and find you a property to buy. We guarantee you won't be made homeless if you or we can't find another home for you to move to.
We call it peace of mind!
If you would like a chat about this, without any obligation, feel free to call Sarah Mains Residential on 0191 487 8855.