We’re used to hearing how hard it is for first-time buyers to get onto the property ladder, but last-time buyers (LTBs) can face a struggle to find the right property, albeit in different ways.
Downsizing is something many of us associate with our later years, but the cost and tax implications (as well as the lack of suitable properties available for older downsizers) means it will be nearly impossible for all of us who may want to downsize to actually do so.
As such, advisers have a key role to play in engaging with older homeowners who may be unable to afford to downsize, reluctant to move house or just fearful of the hassle and logistics involved in downsizing.
Those customers who are encountering these types of difficulties could benefit from being presented with the alternative options available to them, such as lifetime mortgages, which could help them to stay in their current property while accessing funds for their retirement.
Key facts and figures
In contrast to LTBs, young, growing families are more able to plan ahead when it comes to seeking a property which is fit for purpose. They’re likely to know that they’ll need extra bedrooms for children; a garden is a desirable asset, as is proximity to local amenities, etc. However, most of us don’t see ‘moving on’ as being an issue as our lives progress.
As we grow older, we become less certain about what the future holds. As we work our way up the mid-life career ladder, moving to a larger property with room for a growing family is seen to be the way to go – but as we age, exactly the opposite becomes the perceived norm.
When L&G conducted our LTB research project last year, in conjunction with the Centre for Economics and Business Research, our results showed more than 3m homeowners aged 55 or over were open to the idea of downsizing their family homes.
Of course, this is something that makes sense as people age. Gardens can get out of hand, spare bedrooms aren’t used and taking care of a large house can be a drain on the energy and finances of many older people.
It is crucial that those who are looking to downsize but are unable to are aware of the other optionsIt’s these homeowners that we call the LTBs – individuals who are usually in, or on the verge of, retirement. Usually 55 or over, these older borrowers are starting to review the family home in terms of its long term suitability and as an alternative pension for their retirement.
