Baby boomers are beating first-time buyers to cheaper property as they use their home to form part of their pension and downsize, says property developer MDA.
Battles between first-time buyers and retirees for the same properties could further fuel the market.
Mark Evans, director of MDA, says: “Around four million homeowners are relying on property to boost their retirement income but could face stiff competition from first-time buyers.”
Evans adds: “People aged between 50 and 60 hold around £560bn in home equity. When they sell up to downsize, they'll be pitched against first-time buyers struggling to get on the property ladder. There is every chance that first-time buyers could be left even further behind as they lose out to cash-rich retirees.
“I predict a rise in demand for smaller two-bedroom houses and apartments and a drop in demand for larger three or four-bedroom ones.”