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Downsizing logjam to lock a million more bedrooms out of the housing market

Spare Rooms
Spare Rooms

A million more bedrooms will be locked out of the housing market over the next 10 years as England’s ageing population fails to downsize, new research shows.

From 2022 to 2032, the number of homeowners living in properties with two or more spare bedrooms will jump by 12pc to hit a peak of 9.2 million, according to analysis by Hamptons estate agents.

At least 972,300 more spare bedrooms will be locked out of the housing market in England compared to in 2022.

This figure allows for the fact that many of these homeowners may previously have already had one spare bedroom. In total, the number of spare bedrooms locked out of the housing market will be 18.4 million – and this figure does not include households who have only one spare room.

The number of spare bedrooms locked out of the housing market has increased steadily. By 2032, the number of spare bedrooms will be 72pc higher than in 1996.

Back then, there were only 5.3 million homeowners living in under-occupied properties, meaning a total of 10.7million spare bedrooms.

This is not simply a result of population growth – the share of homeowners with two or more spare bedrooms has surged from 39pc in 1996 to 53pc in 2022. By 2032, it will have hit 55pc.

The reasons behind the shift are twofold. First, soaring house prices in proportion to earnings mean that homeownership has become increasingly concentrated amongst older age brackets. Second, Britain’s population is ageing – which means the number of older people is swelling.

At the same time, it has become increasingly difficult to move house. Buyers face record wait times and stamp duty banding means purchase taxes have soared disproportionately to house price growth.

David Fell, of Hamptons, said: “The vast majority of households under occupying their home are homeowners, predominantly those who are older and own their home without a mortgage.”

Over the last 10 years, while an increasing number of baby boomers and Gen Xers have paid off their mortgages, millennials have got onto the housing ladder, Mr Fell said.

The number of new homeowners is likely to fall further as higher interest rates hammer buyer affordability, Mr Fell added.

But 2032 should mark the peak in spare bedrooms, as the population demographic trends change and older homeowners pass away faster than they are replaced, Mr Fell said.

Hamptons’ analysis used English Housing Survey data and was based on the trend over the previous 10 years.

The numbers show that the national housing crisis is rooted not only in the question of supply, but in how efficiently Britain’s homes are used.

Analysis of the latest Census data by Positive Money, a non-profit, found that there are 1.4 million more homes than households across England and Wales. This is because many people own more than one property.

In every single region, there are more dwellings than households living in them. In the South West, there were 7.3pc more homes than households – the largest “surplus” in the country.

In London, there were 7.2pc more homes than households – extra 250,000 properties.

Nationally, the number of “surplus” homes has nearly doubled in 20 years. Back in 2001 there were 757,000 more homes than households.

Part of the increase may be due to pandemic trends, as many students and young people moved back in with their parents, decreasing the number of overall households, but the historic trend shows this issue is endemic.

Martha Dillon, of Positive Money, said: “Second homes are a part of it, absolutely.”