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It is estimated that around 1.45 million homeowners aged 65 or over are considering downsizing over the next five years, either to find a more suitable home to spend their post-work days in or to cut costs. However, many are having difficulties finding a new home to move to in their local area, a study from Key Retirement reveals.
With 30% of over-65 homeowners (the equivalent of 1.45 million Brits) considering downsizing, that means a lot of houses will need to be found, and these last-time buyers may have some exacting requirements. The strain may be particularly high in the North East, where 58% (or approximately 159,500 Brits) are considering downsizing, followed by the South West (44%), with homeowners over 65 in the East Midlands least likely to want to move (17%).
Across the country, Key Retirement estimates that more than 620,000 over-65 homeowners are struggling to find a suitable home, while 500,000 have considered moving but not found accommodation that would leave them much better off financially. This is a major concern, as 53% of respondents said it was becoming too hard to keep up with all the DIY jobs that needed doing around their home and 27% admitted they were struggling to afford the maintenance costs on their current home.
Other incentives to move included worries about bills and the need for repairs (42%), while 17% simply felt the house had become too big for their needs. With only 11% of the questioned homeowners having downsized already, more clearly needs to be done to help those in homes they no longer want to live in.
"Downsizing should make financial sense for older homeowners as it releases money to pay for retirement and it also should make sense for the property market as a whole as it frees up bigger houses," said Dean Mirfin, chief product officer at Key Retirement. "But despite the numbers of older homeowners wanting to downsize it is clear they face problems in finding suitable homes for retirement and for many the finances just don't add up. Unfortunately, that leaves them struggling to maintain homes, and in many cases, struggling financially."
While downsizing or at the very least remortgaging to decrease repayment costs (for those who still have a mortgage to pay, that is) may seem like the most logical steps, retired homeowners should not discount equity release. By releasing equity from their home, they could be in a much better place to deal with all the financial concerns and maintenance jobs that are required around their home – and in a lot of cases they'd still be able to move if they wanted to.
So, why not have a look at our equity release page? This not only gives an overview of the products on offer at the moment, but also answers a lot of questions below the chart for those not sure what releasing equity entails.
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