Downsizing would be big benefit to economy
Published 03/01/2011 | 08:00
Although the offer by older people to forego their winter fuel allowances and bus passes is admirable, the fact is the major cost for most families with children or university-age adults is housing.
Most recent building has been in one or two-bedroom dwellings, yet many older people whose children have left home continue to live in four or five-bedroom houses.
This greatly reduces the supply of such houses to the type of families who actually require the space, thereby having the effect of pushing up house prices. A great round of downsizing by empty-nesters would have several beneficial effects.
It would increase the supply of larger houses, thereby reducing their cost; it would generate additional tax revenue in stamp duty, it would enable the downsizers to reduce their running costs and, if they spend their bonanza, it would provide a boost to the economy and additional VAT receipts.