Fiftysomethings banking on downsizing
One in eight plan to use some of the money to help their children get onto the housing ladder
Alex Johnson has been part of The Independent's online team since 2007. He has been writing about microarchitecture on his internationally-acclaimed Shedworking blog since 2006 and is the author of Shedworking: The Alternative Workplace Revolution. His latest book is Bookshelf, published by Thames & Hudson.
Thursday 22 May 2014
More than a third of homeowners aged over 55 plan to sell their houses and one in five expect to sell and buy another property within the next five years, according to a new report from the Prudential.
More than three quarters of those who are planning to sell say that they aim to release equity from their home by downsizing, on average around £85,000, although nearly one in ten are expecting to raise £200,000 or more.
The most common reason for trading down, cited by 60 per cent of over-55 downsizers, is the convenience of running a smaller home. A third say the reason is to raise money, while one in five want to save money on the cost of running their home.
However, the research highlighted that the costs involved with moving house are a major barrier to downsizing. More than a quarter say they are likely to be deterred from downsizing by the total bill for buying, selling and moving home.
"Homeowners who have been lucky enough to gain from the long-term strength of the housing market should exercise caution if they are banking on downsizing to be the magic wand that provides a decent retirement income," said Vince Smith-Hughes, retirement income expert at Prudential. "In some cases the amounts of cash realised can be lower than expected and the cost of moving house should not be underestimated."
The over-55 downsizers also say that they are not planning to keep all the money to themselves. One in eight plan to use some of the money to help their children get onto the housing ladder.
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