Two-thirds of the UK’s 15 million surplus bedrooms are in the homes of over-65s, a report by the Centre for the Study of Financial Innovation on retirement housing has found.

The research, commissioned by the Associated Retirement Community Operators, predicts that the number of surplus bedrooms in the UK will swell to over 20 million by 2040, with 60 per cent of these in the households of older people.

The report, entitled “Too little, Too late? Housing for an ageing population” calls on the government to promote the benefit from downsizing and incentivise home owners to do so before they require social care.

It suggests stamp duty cuts for downsizers and urges ministers to develop a joined-up strategy that addresses health and housing needs for older people.

The report found that just 7,000 new homes built each year are designed for older people, yet it predicts that 180,000 65-plus households will be created each year over the next decade. 

Equity Release Council chief executive Jim Boyd says: “We welcome the CSFI’s report and have long called for ways for government to better support downsizing. 

“This will give people in later life more choice when they consider how best to plan their lives in retirement.

“This choice is important as the report recognises that many wish to downsize when they reach retirement but have limited options. 

“It also recognises that over-65s often choose to continue living in their existing homes. 

“Our research suggests many homeowners want to live in their property for as long as they can in later life, and often share that home with multiple generations. 

“Many want to keep on living in the communities which are so important to them, and where they have strong associations and memories.”

Boyd adds: “Looking ahead, flexible home finance options that unlock property wealth have the potential to transform the UK’s existing housing stock to improve carbon efficiency levels by encouraging retrofitting and making green home improvements. 

“Providing access to ‘green equity release’ products would help people unlock cash to fund energy efficient improvements and retrofit properties to meet environmental as well as care-related needs.

“Finally, we support the call for a more joined-up approach between government departments dealing with housing and health for older people. “We believe there should be a minister for the elderly who can ensure broader social and financial issues are co-ordinated across all policy areas that impact our ageing population.”

Legal & General chief executive Nigel Wilson says: “Our housing stock needs to work for everybody. 

“People of all ages need more supply of housing and better choices, whether they are trying to accommodate a growing family, looking to rightsize to a healthy and safe later living environment, or indeed to retrofit their existing home. 

“We know there is strong demand for the right sort of housing for later life living, with great design, supportive communities and good access to friends, family and facilities. 

“Housing policy now needs to catch up with the demands and opportunities of our ageing demographic: getting this right has benefits for everyone.”