Many people think that they'll be able to use their property as their retirement fund, and may look to downsizing in order to achieve that. However, it seems that when the time comes, few want to actually take the plunge, with research from My Home Move finding that 58% of over-55s surveyed have no intention of downsizing.
This may come as little surprise to those who can't bear the thought of leaving the family home, but unfortunately, it means that there are fewer suitably-sized properties available for other people to start their own families.
Unfortunately, even those who would consider downsizing (25%) are finding it difficult: the cost of moving, particularly stamp duty, is a key barrier for 40% of respondents, as is the lack of suitable properties available (39%). Indeed, the survey found that 46% of would-be downsizers want to move into a bungalow while 20% are seeking a detached property, with the latter in particular being prime family home material.
"The housing market has been suffering from a lack of stock for over 12 months, causing demand to outstrip supply time and time again," said Doug Crawford, CEO of My Home Move. "This has resulted in sky-high house prices, increasing instances of gazumping and the Bank of Mum and Dad being called upon regularly to help first-time buyers with their deposit.
"Unfortunately, the findings from our survey suggest the situation is unlikely to ease, especially as 58% of those questioned have no intention of downsizing to release more top-end properties onto the market anytime soon."
He added that it was little surprise that the cost of moving was seen as a stumbling block for those approaching retirement, as "despite the changes to stamp duty in 2014, the costs involved in moving can still tally into the thousands… We have seen stamp duty holidays for first-time buyers in the past, so there is no reason the government couldn't extend a similar scheme to downsizers, to help free up the market and get transactions moving."
Whether or not this idea will come into fruition is a different matter, but it's certainly an intriguing notion. It may not solve all the issues but it could certainly help get the cycle moving again, and hopefully, the supply/demand imbalance will at some point be solved to ensure downsizers and new families alike get the properties they need.
Considering downsizing? You may need a new mortgage deal to help
If downsizing isn't for you, it could be worth thinking about equity release. Consult our no-obligation planning service for more information.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.