Equity Release  

One-in six potential downsizers have second thoughts

One-in six potential downsizers have second thoughts

The cost of moving, house valuations and difficulties in finding somewhere new to live are key reasons why homeowners who contemplated downsizing have decided against selling up.

These factors were obstacles for 17 per cent per cent of homeowners, according to a study by Bower Retirement, the equity release provider.

More than half of the prospective downsizers who were deterred identified the high costs associated with relocating as a factor, while around two in five said they could not find a property they would be happy to call home.

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One in six said they were put off by the lower-than-expected valuation of their current home.

Around half of those who did downsize told their advisers that they did not have the appetite for moving away from friends and family.

Andrea Rozario, chief corporate officer at Bower Retirement, said: “Downsizing is logical and sensible and can work for some over-55s homeowners but only if they can find the right house at the right price.

"But there are financial issues to deal with when moving house with stamp duty alone costing 5 per cent on house prices above £250,000 which can make the decision to move uneconomic. Buying a £300,000 home would cost around £5,000 in stamp duty.

“It is also not just a financial calculation as there are emotions involved when moving home with the risk of losing touch with family and friends making downsizing seem a bad idea for many.” 

Pensioners released £2.1bn of property wealth in 2016, according to equity release provider Key Retirement, hitting a new all-time high after the fifth year of growth.