Downsizing---Choice or Necessity?

Up to 2.3 million homeowners aged 55 and over are banking on raising an average of £85,300 each by downsizing their homes according to research conducted by Prudential.

The research found that 38 per cent of over 55 homeowners expect to sell their houses at some point, with one in five (20 per cent) expecting to sell and buy another property within the next five years. 

More than three quarters (77 per cent) of the over 55 homeowners who are planning to sell say that they aim to release equity from their home by downsizing. The average amount they hope to release is around £85,300. However nearly one in ten (9 per cent) are expecting to raise £200,000 or more. 

When asked how they plan to make use of the money raised, over 55 downsizers are equally as likely to splash out on a one-off purchase (42 per cent) as they are to save or invest a sum (41 per cent). Nearly three in 10 (29 per cent) are planning to put some of the money into their pension pots. 

The most common reason for trading down cited by 60 per cent of the over 55 downsizer is the convenience and the ease of running a smaller home. A third (32 per cent) say the reason for downsizing is to raise money, while one in five (21 per cent) want to save money on the cost of running their home. 

The changes to pensions and how people can take their retirement income announced in the Budget in March will provide savers and retirees with increased choice. Our research also shows that homeowners are thinking carefully about what to do with the even greater degree of choice provided by expected gains from the value of their home. Faced with all these potential decisions, people approaching retirement should seriously consider taking professional financial advice. 

The over 55 downsizers also say that they are not planning to keep all the money to themselves. One in eight (12 per cent) plan to use some if the money to help get their children onto the housing ladder while 15 per cent say they will use the money to assist their offspring with other financial issues. So, do you know how much your house is worth? We will provide a Free Valuation to set you on your way. Just call 01993 779020