Figures suggest retirees are shunning downsizing. Moving to a cheaper home used to be a common way to unlock wealth tied up in property to fund retirement. However, a new trend means that over 55s are more likely to plan to remain in their current home.
According to research from Nationwide:
Even among those that do plan to retire, it isn’t a decision that’s without conflict. Whilst 56% recognised a smaller home may be easier for them to manage in old age, 73% said they would stay in their current home if they could.
Jason Hurwood, Nationwide’s Director of Home Propositions, said: “The perception that all older people want to downsize to much smaller properties is outdated and cliched. As the research shows, people aged 55 and above are putting off the traditional downsizing house move, with space being very much in demand for a range of reasons – from entertaining friends and family to allowing them to keep and store valuable keepsakes and belongings.”
If you’ve decided you don’t want to move out of your home in the future, it could be for a variety of reasons.
According to the poll, this was one of the most popular reasons for deciding to stay put. In fact, 43% said location was the reason they wanted to keep their current property. In addition, 18% said that being close to family was important to them. When you’re moving home, you not only have to think about the property but how the location suits your lifestyle and needs. This may be the proximity to amenities, good transport links and having family and friends close by. If your current home ticks all the boxes, moving can seem like an unfavourable step.
Whilst moving to a smaller property may have some benefits, it may not be suited to your lifestyle. Almost half (49%) said their reasons for staying put was that a smaller home wouldn’t be suitable. This was also emphasised by other responses:
As young people are finding it difficult to step onto the property ladder, more are choosing to live with family whilst saving a deposit. As a result, it’s reasonable to expect that some over 55s will still have children or grandchildren living with them too. Therefore, a family home might be essential well into retirement.
You probably have specific tastes when it comes to your home. Whilst you could unlock money by moving to a smaller home, how much would you need to spend to make it suit you? If you’ve invested significant amounts into your current home, it’s easy to see why you might be reluctant to leave it behind. It’s not just the money either, even small renovating projects can take up a lot of your time.
On top of these reasons is the cost of moving home. From conveyancing fees to the money paid out to estate agents, the figures can mount up. Assuming your home is sold for more than £125,000, you’ll also need to factor in Stamp Duty Land Tax (SDLT). The SDLT rate is based on the value of the property but it could mean losing thousands of pounds you’d hoped to release through downsizing.
When you think about your future, are you still living in the same property? If have no plans to retire, there are some areas to consider, among them:
If you’re thinking about how decisions relating to property will affect your lifestyle, please get in touch. Whether you hope to release capital by downsizing or want to remain in your home, we’ll help you get to grips with your financial situation.