At a time when much debate in the UK centres on insufficient housing to cater for the needs of a burgeoning population,encouraging downsizing by older people to make way for buyers of a younger generation is again being put forward as part of a solution.
Apparently,according to the Prudential, more than 2m homeowners over the age of 55 and over plan to downsize in the next few years.Another report suggests that downsizing could release upto £100,000 cash from the average property sale in the UK (in London this figure could be as much as £275,000).
So why and why now?
Homeowners have for many years felt trapped in the economic recession but they are now becoming more confident about the future and making a major lifestyle move. For many, the sale of a current property means:
-more appropriate living space as needs change in older age
-having more disposable cash perhaps to distribute to family
-help to ‘make ends meet’ in retirement,
-being able to spend on holidays and travel
-funds to secure long term care.
Most of those in the Prudential survey said that cash released by selling the equity in their property would be used to fund their later life.
Restricted physical mobility, high property maintenance and refurbishment costs,the ever increasing utility prices for gas,water and electricity are just some of the drivers for downsizing according to the website downsizingdirect .com
This trend to downsizing is is seen by many commentators as good for the general property market, freeing-up housing for those finding it difficult to step onto the property ownership ladder.Some feel it may also lead to the building of new developments to suit an ageing population where services and the benefits of community will provide greater fulfilment and quality of life.
The strong message seems to be for those looking to downsize is to seek appropriate professional financial advice. It is important to have a realistic expectation of what a sale will yield, and what will be left after all the costs of selling,buying a another home, and moving have been factored into the mix.
Have you had recent experience in this?Do let me know.