Comments : Is downsizing the way forward for the older generation?
According to a recent report provided by Prudential, it states that during the coming five years more than a third of current property proprietors above the age of 55 are planning to sell their homes in comparison to one in five who intend to sell their current property and eventually obtain a new one. Based upon the decision to sell, over three quarters of these people are hoping to withdraw equity from their home by considering the option of downsizing. The average amount of equity the home owners are expecting to receive when downsizing is around £85,000 but one in ten are hoping to collate £200,000 or above.
Almost 60% of people who are above the age of 55 agree that the most valid reason for downsizing is because of the ease of keeping a smaller home which would be tremendously convenient for them. However, recent research has pointed out that varying costs which would be encountered during the relocation process are the most obvious obstruction when aiming to downsize.
When calculating costs and expenditures to begin with, over a quarter of home owners stated that they would be discouraged with regards to downsizing because of the overall cost figure at the end of the selling / buying or moving to a new home procedure.
A former income expert from Prudential, Vince Smith-Hughes who has now retired stated; “Homeowners who have been lucky enough to gain from the long-term strength of the housing market should exercise caution if they are banking on downsizing to be the magic wand that provides a decent retirement income, In some cases the amounts of cash realised can be lower than expected and the cost of moving house should not be underestimated”.
With the idea of downsizing and the numerous possibilities that it can unveil, the majority of people hoping to do so over the age of 55 say that they are not intending to keep all profit that is made entirely to themselves and one in eight hope to help their offspring onto the infamous property ladder.
Do you see downsizing as an option in the future?
Nicole Cran, Pali Ltd
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