New study reveals a third of over-55s want to downsize

downsize-your-homeOne in three homeowners aged 55+ (32.6%) are considering or expect to consider downsizing, according to a new study from the International Longevity Centre – UK (ILC).

This figure rises to nearly one in two of all homeowners aged 55+ (48.2%) when factoring in those who have already sold their home and bought somewhere smaller (15.6%).

The study suggested more than half of people in London and 42% cent in the southeast expect more than £100,000 of equity could be released through downsizing, underlining the boost from house price growth to the finances of older generations.

The top reason (56%) for downsizing was that small homes require less maintenance. Just under a third (29.3%) wanted to downsize as a way to release equity, with 19% managing to release more than £100,000. Of those who did release their equity, over a third (35.2%) put the money into a savings account while 34% of people aged between 55 and 59 added it to their pension pot.

The ILC also highlighted the “substantial but unmet demand” for downsizing in later life, where lack of both suitable homes and specialist retirement properties are putting some homeowners off the move. Looking at ways to make downsizing a more attractive option, it stated a greater number of older people might be encouraged to move if the government waived stamp duty for purchases of retirement accommodation above a certain age limit.

Cameron Ewer, at Strutt & Parker in Cambridge says:The Government has focused a great deal on helping first time buyers in recent years, but more needs to be done to help downsizers in later life. If we can find a way to allow older people to downsize more freely, more family homes will come onto the market and help to ease the UK’s housing shortage.”

 

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