Around 1.4 million homeowners in the UK aged 65 will consider downsizing in the next five years, according to a nationwide estate agent report*. With reasons ranging from cutting household bills and having a more manageable house to wanting to move area and boost retirement income, downsizing should make financial sense.
However, estate agents say that around one in three of downsizers have given up on selling in the past two years. A combination of difficulties including struggles to sell their own property, not getting what they want financially for their home and a lack of suitable homes to move into means it’s unfortunately not always a quick and easy process.
More features, including downsizing protection
In light of this report, it’s unsurprising that equity release is an option that homeowners over 55 are considering to help financially during retirement. While it’s not suitable for everyone, for those who want to stay in their own home, it can free up the cash to help adapt and maintain their property. Equity release
may involve a lifetime mortgage
, which is a loan secured against your home, reducing the value of your estate and may affect your entitlement to means
In recent years, more new products and features have come onto the lifetime mortgages market, including downsizing protection. This means that, if in the future, you still want to move to a smaller home – typically when the property you’re moving to doesn’t meet the lender’s criteria – you can pay off the loan plus any accrued interest totally free of early repayment charges.
Taking out an equity release plan is a major decision and you should only do it after careful thought and taking independent specialist equity release advice, such as Key. Remember, you’re under absolutely no obligation or pressure to proceed with us as a result of talking to us. The initial consultation is free with no obligation to proceed. If you decide to go ahead with an equity release plan our advice fee, usually 1.99% of the amount released, subject to a minimum of £1,499, is payable only on completion.
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*Research conducted by independent researchers Pollright among a national sample of 101 estate agents between May 18th
and June 1st
, 2018 and Research conducted by independent researchers Consumer Intelligence among a sample of 502 homeowners aged 65 between May 17th
and June 4th