So although many may not want to admit it, downsizing has become a part of life for people approaching retirement.
In the coming decades, people will start to see their property as an integral part of their retirement plans. Downsizing, therefore, will surely boom? Well, there are numerous issues that stand in the way of any downsizing spike.
First, it really isn’t that easy. For the elderly, finding a suitable property has become far harder in recent years, and this has led to thousands who really should move becoming stuck in their current properties, without the means to maintain them.
Research has shown that almost 50% of homeowners who classify as under-occupiers, are over the age of 55.
So, it’s clear that a huge proportion of homeowners approaching, and already in, retirement are finding it hard or impossible to find a suitable property.
Second, for those that do find a suitable property, the costs of moving can be enormous. The average cost of downsizing hovers around the £10,000 mark, and triples to £30,000 if you live anywhere near London.
What’s more, things like Stamp Duty, as well as the Stamp Duty Surcharge, are hurting older homeowners more than anyone else.
Equity release lender More 2 Life recently reported that, of the 52% of their clients who said they couldn’t find a suitable property, as many as one in five explicitly pointed to ‘Stamp Duty being too high’.
Older homeowners are therefore facing a sticky situation. They may want to downsize but the cost is high and even finding a suitable property can be nigh on impossible.
The problem is only intensified for those that need to modify their home for health reasons. Properties can become unmanageable, even dangerous, for elderly people – but there is a solution.
Equity release has been helping people stuck in the downsizing doldrums for decades.
Lifetime mortgages can be the perfect solution for those that need a cash injection in retirement, but can’t downsize. Home improvements have always been one of the main reasons our customers release equity, but we are not making enough of this fact.
For many people these improvements are not just trivial, but often vital. Equity release truly can reinvent retirement living, and help the stuck generation feel less trapped.