Pandemic leads to jump in UK sellers looking to retire early

The number of people looking to downsize has jumped by a third in the past year, as the pandemic brings retirement plans forward and more flats are listed for sale.

In the 12 months to November, the number of new prospective buyers registering with Knight Frank in the UK looking to downsize - and potentially benefit from an increase in capital values after two years of strong house price growth - increased by 33% compared with the previous year.

Buyers in the country market have been getting younger over the past decade, but the pandemic has provided extra impetus for people to reconsider their life plans and retirement goals.

Indeed, an ONS study released earlier this year examining the increase in economic inactivity of people over 50 since the pandemic, found that the most common reason was retirement. Amongst those that had left employment since the pandemic, 63% felt they had done so sooner than they were expecting.

“Traditionally people downsize in their late fifties or sixties but since the autumn of 2020 this average age has come down,” said Nigel Mitchell, Knight Frank regional partner for the South East.

“Covid has changed the way people think and they are now more focused on quality of life. Many are also capitalising on the strong house price growth of the last two years,” Nigel added.

As well as more owners looking to accelerate retirement plans, the re-emergence of more flats on the market as the pandemic winds down means this demand can be increasingly satisfied. New instructions for flats were up by 17% in the 12 months to November compared with the previous year, Knight Frank data shows. The equivalent increase for houses was 10%.

The so-called “race for space” meant houses, especially those with outdoor space, were in high demand during the pandemic. City markets, which typically have a high proportion of flats, have subsequently found favour again after Covid restrictions were lifted.

While October was not a vintage month for the UK property market, the dip in average house prices was likely magnified by the impact of the mini-Budget.

We do not expect the significant contraction that was seen during the global financial crisis; however, we do expect house prices to come under pressure next year, which we set out in our latest forecasts.

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