Housing policy should be focussed towards encouraging over 55s to downsize, experts have said, after finding there are now 1.3 million fewer houses available since the 1980s because people are living longer.

A new report from City University of London said the government was too focussed on first-time buyers, when it would be more worthwhile to help ‘last-time buyers’ to move and free up family homes.

The average household size has fallen from 2.48 in 1980 to 2.36 in 2018, largely due to the ageing population, with people now living for decades on their own in large houses after their children have left home or their spouse has died.

But the report found that many people are reluctant to downsize because modern flats are often unsuitable for older people, or have far smaller rooms than they are used to.

Experts at the Cass Business School at City, are calling on the government to offer tax incentives to older people if they downsize, and build more retirement homes, bungalows and larger apartments.

Report's author, Professor Les Mayhew, said: “The UK population is growing and also rapidly ageing thanks to improvements in life expectancy.

“By taking a long view, the research clearly shows the origins of today's housing crisis and what can be done to tackle it. A better alignment of the housing stock with housing needs, along with improved financial incentives, would significantly alleviate housing pressures to the benefit of all."