Down-sizing, once the preserve of retired home owners, is now a phenomenon in the rental market too.
That’s the claim of Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, who says it’s less a ‘race for space’ and more a ‘crawl to small’.
“The race for space is being won by the better paid, while younger people are starting the ‘crawl to small.’ At the moment, with lockdown savings still kicking around, and some wiggle room in the budgets of higher rate taxpayers, some people can still afford to keep climbing the property ladder. However, as the cost-of-living bites, there will be plenty more who end up dropping back a rung or two instead” she says.
She says that amongst existing home owners, 12 per cent of those aged 24 to 35 are planning to downsize.
She says this will include some who move out of the family home later, but also young renters who are being forced to downsize by rising rents – especially if they’re simultaneously trying to save for a home themselves. It will also include those who eventually buy, and may have to downsize again to get onto the property ladder.
One in 10 renters in this group will move areas too, Coles says part of this may be a move further afield to be able to afford more space now that hybrid working is becoming more common. However, a major part is also likely to be a move to a more affordable area in order to avoid paying more rent or downsizing in a more desirable area.
She adds that as time goes on, and more landlords hike rents and prices keep rising, this trend will have a more far-reaching impact. “We expect more people to consider downsizing across the board or moving somewhere more affordable as we go through the year” she concludes.
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