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Should I Downsize My Home?
There has been a significant reduction in the amount of homeowners over the age of 55 looking to downsize in the near future. Over the last 3 years the number has dropped by 200,000 according to research [1]. This study also highlighted how potential downsizers make up to 24% (nearly a quarter) of all households aged 55 and over – this equates to more than 2.9 million homes.
In 2018 this figure was closer to 3.1 million homes. The total property wealth of the over-50s is estimated to be £3.8 trillion with 74% of over-55s owning their own home (according to the Office for National Statistics). The reduction in over-55s considering a downsize over the last 3 years has led to a growing trend in ‘Forever Homeowners’ who decide to stay in their home.
The Impact of Lockdown
When asked why future plans changed the primary reason for the over-55 homeowners was not wanting to leave their community. This issue was further highlighted by the COVID-19 pandemic where the importance of having family and friends nearby was a lifeline.
Many of us spent significantly more time in our homes during the lockdowns and this has had a huge impact on this group’s decision not to downsize. 24% said they enjoyed having more space during lockdown and this isn’t something they wish to give up. 13% made the decision to then invest in their home as opposed to moving.
Financial Situation
Some ‘Forever Homeowners’ have made the final decision not to sell whilst some are keen to reassess their decision in the future. For the over-55s who haven’t sold their homes, nearly a quarter have confirmed they would still consider downsizing their home but would like to see how their financial situation develops first. For older homeowners it’s evident that the pandemic has impacted their mindset with an uplift in those who want to keep their home. Growing closer to their local community, with family living nearby, and lots of space to relax in during lockdown have all become key factors.
Practical Considerations
Moving home is a stressful experience, particularly later in life. There are many practical and emotional considerations. As the research suggests, many over-55s are still open to the possibility of moving but waiting to make a decision so they can mull things over. Now that lockdown has eased we may well see a shift in this position. As one our most valuable assets, downsizing your property presents a potentially difficult situation should the funds one day be needed to supplement retirement.
Home Improvements
Unlocking equity from your home can be a huge help for those who decide not to move. This money can be used, when the time comes, to help make home adaptations. There are things to consider if this a route you want to go down and it is always advisable to seek professional advice in regards to this.
Transparent Mortgage Services
For help with switching your mortgage provider, or assistance with borrowing to help with home improvements or plan for the retirement you hoped for, contact Transparent Mortgage Services.
[1] Opinium Research ran a series of online interviews among a panel of 2,000 UK adults, of which 603 were homeowners aged 55+, from 23 July to 27 July 2021
