Lenvi’s report outlines ways lenders can respond to the effects of an ageing population on homeownership in the UK.

Lenvi, a UK-based fintech serving more than 150 lenders, has today published The Generation Gap – a new report examining how the UK’s ageing population is reshaping the housing market, and what lenders can do to respond.

By 2050, one in four people in the UK will be over the age of 65, up from one in five today. Lenvi’s report highlights the growing urgency for innovation in both lending and housing policy, as the gap between available housing and the needs of an ageing society continues to widen.

Key findings from the report include:

By 2040, the UK is projected to have 12.8 million surplus bedrooms, with 63% found in homes occupied by over-65s.
More than 3 million over-65s want to downsize but feel unable to, restricting the supply of homes available to young families and first-time buyers.
Retirement living accounts for just 3% of the UK’s housing stock – leaving the UK lagging behind many international peers.
A national shortfall of 4.3 million homes is pushing average house prices to 8.3 times annual earnings – compared with 3.5 times in the early 1990s.

With healthier, older homeowners often living in properties that exceed their needs, and younger generations struggling to get on the ladder, market mobility has slowed. This is contributing to a growing housing stalemate.

The report argues that simply building more homes isn’t enough – the UK needs more of the right types of homes. This includes affordable family housing and suitable retirement living, to help ease the supply squeeze and improve overall affordability.

Lenvi’s recommendations include the development of new financial products and government incentives to support older homeowners who wish to downsize. These could include scrapping Stamp Duty for ‘last-time buyers’ and enabling building societies to play a greater role in addressing local supply issues.

Richard Carter, CEO at Lenvi, said: 

“By aligning new housing supply with actual household needs – supporting both older and younger generations in finding homes that match their circumstances – the UK can begin to unlock the full potential of its housing market and ensure that it works for everyone, at every stage of the homeownership lifecycle.

"The recommendations we make in this report toward solving the mobility and supply issues in the market certainly aren’t the only ones – but our hope is that the report provides a springboard to continue the conversation.”