New research has shown that nearly one in three (30%) of over-65s homeowners, the equivalent of 1.45 million last-time buyers, are considering downsizing, but are struggling to find more suitable homes on the open market.
In a nationwide study, specialist financial advisor Key Retirement found that 1.45 million homeowners were considering a move in the next five years to a more suitable home for retirement.
Those wanting a more suitable retirement home are as high as 58% in the North East and 44% in the South West, underlining the fact that they want homes that are more suitable to their needs for their last home.
This could be to do with homes that have lower running costs, are easier to maintain or just smaller in comparison to their existing family homes. But what it does represent for Custom Build is an opportunity in a ready-made market.
The fact that they can’t find suitable accommodation is of concern for the wider homes market, too. It is evidence of the stalling of the natural movement that’s characterised our market previously, meaning that these larger family homes aren’t being freed up for people lower down the ladder to move into.
According to Key’s study, across the country more than 620,000 over-65s homeowners say they have looked into downsizing but cannot find a suitable home in their area while another 500,000 say they’ve considered moving but would not be much better off financially.
Not being able to move in retirement is a major concern as more than half (53%) of over-65s say keeping up with DIY jobs around the house is physically tough while 27% say they struggle to afford maintenance on their homes.
Just over two out of five (42%) over-65s homeowners have worries about bills and the need for repairs on their home, while nearly one in five (17%) say their house is just too big for their needs.
OVER-65 HOMEOWNERS CONSIDERING DOWNSIZING
|Yorkshire & Humberside||33%||95,240|
Key Retirement specialises in equity release from homes, an area that has seen considerable growth in the last decade as people release the value in their home, either to supplement their retirement, offset inheritance taxes or pay bills and running costs.
Equity release increases the choices for those sitting on housing wealth. But it also means that these houses, which might otherwise have been sold to help manage costs, don’t come back onto the housing market, further impacting on the lack of supply of suitable houses for a range of people in the market.
Dean Mirfin, Chief Product Officer at Key Retirement said: “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.
“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.
“Pensioners are sitting on property wealth of more than £1 trillion which could significantly improve their standard of living in retirement and helping them make the best use of that money would boost their finances and the economy as a whole.”