(PRWEB UK) 14 November 2014
Almost 2.5 million 'last time buyers' plan to downsize their homes, according to new research from Prudential(1).
Figures from the bi-annual Prudential Downsizing Index reveal that four in 10 (41 per cent) homeowners over the age of 55 plan to sell their current property – up from 38 per cent six months ago (May 2014).
Three quarters (75 per cent) of homeowners, over the age of 55 who are planning to sell, say they will downsize. The average amount of capital they hope to free-up as a result of these property sales is £87,600 – up from £85,300 in May of this year.
Of those expecting to release equity from downsizing, 45 per cent will spend newly released cash on big ticket or luxury purchases like holidays. Forty eight per cent say they will save or look to make investments, while 40 per cent will use the funds to boost their pension pots.
Having too much space appears to be the main driver for downsizing, according to 61 per cent of homeowners over the age of 55. The convenience of running a smaller home (58 per cent), accessing equity (34 per cent), reducing the day-to-day costs of running a large home (22 per cent) and changes in personal circumstances, including divorce or separation (21 per cent), complete the top five reasons for downsizing.
The Index suggests that many 'last time buyers' are looking for a change, with 35 per cent of those who are planning to sell saying they will relocate to another town or city within the UK.
Vince Smith-Hughes, retirement income expert at Prudential, said: "Our homes are often our most valuable assets, but also one of our greatest expenses. The financial benefits of downsizing, from both a cost-saving and releasing capital perspective, can be very enticing. But those who are considering it should exercise caution and be careful not to overestimate the level of funds they expect to receive.
"Freeing up cash as a result of selling your property may be appropriate for some, but it should never be seen as a substitute for saving for retirement. The best way to secure your desired standard of living in retirement is to save as much as possible from as early as possible and to seek professional financial advice on the best retirement income options available for your needs."
Separate analysis of data from The Census(2) reveals that Cornwall, Arun and North Somerset are the most popular destinations for retirees to move to in England and Wales, for those aged 65 and over.
Notes to Editors
Research conducted between 17 September and 3 October 2014, among 1,012 homeowners ages 55+ by Consumer Intelligence.
1. Estimate based on English Housing Survey showing 7.382 million households aged 55+ in England and Wales https://www.gov.uk/government/publications/english-housing-survey-2012-to-2013-headline-report, National Records of Scotland figures showing 990,020 households with 55+ heads of households http://www.gro-scotland.gov.uk/statistics/theme/households/projections/2010-based/tables.html and home ownership rate of 62% in Scotland http://www.scotland.gov.uk/Topics/Statistics/Browse/Housing-Regeneration/TrendTenure
2. 2011Census Analysis: Internal and International Migration of Older Residents (aged 65 and over) in England and Wales in the Year Prior to the 2011 Census
Top 10 destinations for retirement relocation*
1 Cornwall, Isles of Scilly
3 North Somerset
7 New Forest
8 Cheshire East
*Areas which showed the greatest net inflows of residents over 65 in England and Wales
Cornwall and Isles of Scilly are combined. The small size of the Isles of Scilly means that to ensure confidentiality the figures have been combined with Cornwall.
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