When less is more – why supporting downsizers could help fix the housing market – Duncombe

A fluid market supports economic growth, enables people to live in homes that suit their needs, and keeps the housing ladder functioning for everyone – from first-time buyers to retirees.

A home is not just a financial asset or a roof over someone’s head. It’s the foundation for independence, family life, community connection, and long-term wellbeing. But right now, the UK housing system isn’t supporting those needs as well as it should.

We’re facing a chronic shortage of homes. The government’s target to build one-and-a-half million new homes over five years is a step in the right direction, but there are no signs that we’ll get anywhere near that target. And even if we did, it still falls short.

Independent estimates suggest we need at least 750,000 more on top of that to meet demand. This lack of supply can push up prices, locking more people out of homeownership altogether.

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Downsizers are often overlooked

But it’s not just about building more homes – it’s about building the right homes. Too often, new developments are dominated by uniform, three-storey townhouses or flats that don’t meet the needs of a diverse population.

One of the most overlooked groups in this conversation is older homeowners who want to downsize.

Take bungalows, for example. They have made up only 1% of new housing stock in recent years, according to reports. That’s a problem. If older people can’t find accessible, manageable homes to move into, they stay put – often in larger family homes that no longer suit their needs. And when they decide to sit tight, it blocks the next generation from moving up the ladder.

The result: market gridlock.

This is a classic case of market ineffectiveness. Recent research into downsizing by our parent business, Yorkshire Building Society, revealed that half of all homeowners would consider downsizing if there was more support available – whether that’s financial help, better information, or simply more suitable homes to move into. Among homeowners aged 55 and over, that figure rose to 60%.

These are people with equity, motivation, and a clear desire to move, but the system just isn’t set up to help them. However, among the biggest barriers they face is a lack of suitable local housing – 45% of potential downsizers told us they would move sooner if the right kind of property was available nearby. So, let’s not lump all older homeowners into the same camp. We’re not just talking bungalows by the sea or retirement villages.

This points to a clear opportunity. If we want a healthier, more dynamic housing market, we need to make it easier for people to move into homes that suit their stage of life. That means building more accessible homes in the places where people actually want to live – not just on the outskirts of cities, but in established communities with good transport links, healthcare, and social infrastructure.

It also means tackling the financial barriers that discourage people from moving.

Stamp duty is a prime example. The changes introduced on 1 April have made moving more expensive, not less. In our research, the cost of moving was one of the most frequently cited reasons people were staying put. It’s no surprise that the market is stagnating when people are penalised for trying to right-size their living situation.

That’s why we welcome reports that the government is considering a review of property taxation ahead of its Autumn Budget. But any changes must be carefully thought through. We need a system that encourages mobility without creating unintended consequences elsewhere in the market.

Housing market requires review

At Accord, we believe it’s time for a strategic review of the housing market led by an independent commission – something we have already asked for in our policy paper, Home Improvements. This review should look at the full picture – from planning and construction to taxation and lending – and ask one simple question: is the system working for the people it’s meant to serve?

Because right now, it’s not. First-time buyers are struggling to get on the ladder. Families can’t find the space they need to grow. And older homeowners who want to downsize are stuck in homes that no longer work for them.

Unlocking the potential of downsizers won’t solve every problem in the housing market – but it could be a powerful lever for change. By freeing up larger homes, we create opportunities for families to move up. By building more accessible homes, we support ageing with independence and dignity and reduce pressure on health and social care services. And by making moving more affordable, we inject much-needed momentum into a sluggish market.

As one of the UK’s largest intermediary lenders, we’re committed to championing the needs of brokers and their clients. That means pushing for policies that make homeownership more accessible, more flexible and more sustainable, at every stage of life. We are also doing everything we can, through innovative product and service offerings, to take a flexible approach to providing the funding people need once they’ve found the home they desire.

The housing market doesn’t need more complexity. It needs more movement. And that starts with giving people the support they need to make the right move, at the right time, for them.