Convenience rather than cash is the biggest motivation
There are plenty of reasons why moving into a smaller home makes sense, and more than 3.9 million over-55 ‘empty-nesters’ approaching retirement are planning to downsize to a cheaper property later in life – but it is convenience rather than the cash that is their biggest motivation.
The nationwide study found nearly half (47%) of over-55 homeowners are planning to sell and move to cheaper homes in later life. On average, they expect to raise around £112,000 in equity by downsizing with around one in ten (11%) expecting to make more than £200,000. In fact, more than one in seven (13%) said they could not afford to retire unless they downsized.
Not all about the money
However, it is not all about the money – the main reason for downsizing is the convenience of running a smaller home in retirement. Nearly three quarters (74%) rated convenience as their main reason for downsizing compared with just 28% who said they were doing so mainly to release cash for retirement. Meanwhile, just over one in three (34%) said having a smaller garden was a major motivation.
However, worries about a shortage of homes suitable for retirement, fees and high property prices are the major reasons deterring some older homeowners from downsizing, the study found.
Lack of suitable available housing
A lack of suitable available housing is the main reason over-55s believe downsizing is not more popular – nearly four in ten (38%) blame the lack of suitable houses, while 24% blamed the cost of moving in terms of stamp duty, solicitors and estate agents, and 17% say high house prices put people off.
Of those who expect to raise money from downsizing, 60% will use it to boost their retirement funds and improve their standard of living. Nearly half (47%) will use the cash for travelling more, while 13% want to release equity to help their children buy a house, and 14% will simply give the cash to their children.
Research conducted by Consumer Intelligence on behalf of Prudential between 22 to 23 August 2017 among 1,092 homeowners aged 50+
 Estimate based on English Housing Survey showing 7.725 million homeowners aged 55+ in England and Wales (www.gov.uk/government/statistics/english-housing-survey- 2015-to-2016-headline-report), National Records of Scotland figures showing 1.04 million households with 55+ heads of households (www.nrscotland.gov.uk/statistics-and-data/statistics/statistics-by-theme/housholds/household-projections/archive/1998-based-household-projections/tables#table4), and home ownership rate of 58% in Scotland (www.gov.scot/Topics/Statistics/Browse/Housing-Regeneration/TrendTenure)
Content of the articles featured in this publication is for your general information and use only and is not intended to address your particular requirements or constitute a full and authoritative statement of the law. They should not be relied upon in their entirety and shall not be deemed to be, or constitute advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles.For more information please visit www.goldminemedia.co.uk