Bungalows Shortage Shapes Housing Market as Downsizers Struggle to Find Right-Sized Homes

The housing market is being reshaped by a shortage of smaller homes, a trend that is tightening mobility for older homeowners and frustrating younger buyers alike. A Daily Mail column highlights how many would-be downsizers are stuck between rising prices, moving costs, and political uncertainty over the Budget. With inventory tight, finding a home that is both the right size and affordable has become a central test for many households.

Official data show the share of bungalows in new-build homes has collapsed since the 1990s. National House Building Council figures indicate bungalows made up 11% of new homes in 1990 but only about 1% last year, a level that has hovered under 2% since 2010. The HomeOwners Alliance says 38% of homeowners aged 55 and over would prefer a bungalow for their next move; the group also notes 1.2 million people in that age bracket have abandoned moving plans in the past two years. In a separate survey, a quarter of those who considered moving did not because stamp duty was too high, and nearly 30% cited moving costs as the deterrent.

Industry observers say the shortage is worsened by younger buyers snapping up the few bungalows and converting them into larger, multi-storey homes. On a typical street, several bungalows have seen second floors added, reducing the stock of genuinely downsizable properties. In response, the HomeOwners Alliance has launched a campaign to Bring Back the Bungalow, arguing that adding more small, well-designed houses to new estates would help unlock mobility up the housing ladder and support the government's plan to build 1.5 million homes by 2030.

Analysts say the market must reconcile a broader objective of housing supply with the need for accessible, age-appropriate homes. If small homes are not included in new developments, downsizing remains a bottleneck for equity release and for families trying to move up the ladder. Some industry voices argue that counting more small homes in the statistics could help improve the appearance of progress toward the 2030 target, but the real test is delivering quality, well-located units that serve an aging population.

Beyond policy, the numbers reflect a broader social dynamic: an aging population that wants to downsize but cannot find suitable places to move to, while younger buyers compete for the remaining smaller homes and often decide to adapt existing stock instead of replacing it. The result is slower turnover in the market and continued price pressure on compact homes, even as overall demand remains elevated in many regions.

While the outlook remains uncertain, the issue of smaller homes is increasingly central to housing-market strategy. Builders, planners, and policymakers face a challenge: design and deliver a pipeline of high-quality, smaller homes that integrate into communities, meet the needs of an aging population, and help unlock mobility across the housing ladder while sustaining the government's broader growth targets.