How to buy a house that isn’t on the market

There are many, mutually reinforcing causes of the property crisis: it is too easy to borrow; there are too many people; there aren’t enough houses; what houses do exist are in the wrong place; and many houses have the wrong people living in them. Solutions exist to all of these, some of which involve building and some of which don’t.

In south-east England it is not uncommon to find people living in
£1 million homes who are skint

Today we are going to focus on the fifth problem. Too many people are living in houses which are too big for them. In south-east England it is not uncommon to find people living in £1 million homes who are otherwise skint. I know someone who lives on a long road of four-bedroom houses where they are the only household of more than two. This is daft.

The problem is psychological not structural. Intriguingly, one financial adviser tells me that there is an ironclad behavioural pattern among retirees: unless you downsize before the age of 72, you will never do it unless driven by highly adverse financial or medical circumstances. It isn’t clear why this is – perhaps, once you reach 72 or so, you are reluctant to risk the inconvenience and cost of moving, only to have to repeat the procedure four years later. If this is true, it would be comparatively easy to nudge people into early downsizing by offering a limited-window, stamp-duty holiday to downsizers aged, say, 60 to 72.

But there is another psychological approach which could increase liquidity in the property market. You simply redefine what it means for a house to be ‘on the market’.