Our population is ageing and retirees are staying active for longer. Many people plan to downsize in order to release capital to fund their retirement. But – when faced with the reality of the situation, many people simply can’t move to a smaller home.
In recent research from more 2 life, 73% of Independent Financial Advisors said that they had been asked for advice on property downsizing.
The Barriers to Downsizing
The survey of 205 IFAs confirmed the barriers to downsizing:
- Emotional ties to the family home – 87%
- No suitable property to move into – 52%
- High moving costs – 35%
- Too late to move – 29%
- Stamp Duty too high – 20%
Stuart Wilson, Channel Marketing Director at more 2 life, told Property Reporter: “This new research shows that, understandably, many retired individuals are reluctant to move out of their homes and leave behind the memories and connections they have made there. However, for retirees who still require extra wealth for whatever reason, whether that be to repay an existing mortgage, supplement their current retirement income or pay for a once in a lifetime holiday, equity release is an extremely viable alternative option. Equally, where downsizing is very much part of a client’s plans, advisers should be making them aware of products that can help them make that transition without incurring early repayment fees.”
For many families, downsizing is not an option as adult children are increasingly unable to fund their own homes, despite 74% being in employment.
The research from OneFamily confirms that:
- 24% parents have remained in the family home for longer than expected as their children are still living there
- 47% didn’t plan to have their children living with them for so long
- 70% help their children financially to support them with getting on the property ladder
Georgina Smith of Lifetime Mortgages at OneFamily commented: “Achieving financial goals together as a family takes the pressure off individuals and parents are benefitting from having their grown-up children helping out with the household finances.”
Jason Dyer of JTM Homes said: “It’s increasingly difficult for young people to join the property ladder, hence the increase in house shares and the trend towards renting instead of buying property.”
To discuss the options available for you and your family, contact JTM Homes of a friendly, no-obligation discussion. Our expert team can offer current information, contacts and property options to help you make informed plans.