Pensioners in London own their homes for nearly 26 years before accessing their wealth, while nearly one in three of those who release equity have lived in their house for 30 years or more, analysis from Key Retirement shows.
Dean Mirfin, technical director at Key Retirement, said: “Equity release customers are accessing an average of nearly £75,000 from their property wealth without having to tackle the financial and emotional issues involved in moving home.”
Cost is an important factor for many homeowners who choose to stay and improve their home rather than downsize.
Prices have jumped by an average £143,000 to £203,800 for those who bought their home in early 1993 – while Londoners have seen an increase from £93,130 in 1989 to £408,000. Downsizers will typically face Stamp Duty of 2% on the proportion of a home’s value over 125,000, rising to 5% for the proportion over £250,000.
Dean Mirfin, technical director at Key Retirement, said: “Stamp duty, legal and removal fees and the cost of turning their next house into a home make downsizing an expensive option for many.”
He said the risk of losing touch with friends and family and local services, including healthcare, can also impact negatively on the decision to move.
“Downsizing is logical and sensible and should work in theory for many, but turning the theory into practice is tougher than it seems and the theory overlooks a wide range of issues that are important to retired homeowners.
Mirfin added that until the right sort of properties are built in the right quantities, both the maths and availability to facilitate downsizing remain a huge challenge.
