Homeowners Downsizing To Help Offspring Get On The Property Ladder
Recent research has found that home owners are more likely to spend their extra cash getting their kids on the housing ladder, rather than supporting them through education.
The full service estate agency Yopa conducted a survey of 1,000 homeowners aged 55 and over. The survey found that only 6% would use the money from downsizing to support their children through university, compared to 22% who would choose to spend the money on helping their kids get on the property ladder.
With recent research suggesting that just one in four young people will get on the housing ladder by 2026, this could be a very helpful way for downsizers to give extra cash to their kids.
According to Prudential, 47% of homeowners over the age of 55 are planning to downsize in their later years.
However, the process of downsizing can come with many different factors to consider. 33% surveyed said that they wouldn’t give up having a garden, or some sort of outdoor space. 13% say they wouldn’t give up a car parking space.
There are clear benefits to downsizing, such as less space to manage and maintain, and more money to enjoy retirement. But moving home can be stressful, and the costs can easily mount up.
The price of stamp duty and other legal fees means that some downsizers may have less money than they originally thought to help get their children on the property ladder.
Older homeowners may also find the thought of downsizing unpalatable given the political uncertainty over stamp duty. If, as the Prime Minister had speculated, the stamp duty threshold is increased to £500,000, this may encourage more later house moves in England and Wales.
However, the prospect of a liability switch in the offing may deter later life moves until this issue becomes clearer, reducing the money being offered to the younger generation.
How important is the bank of mum and dad in stimulating the housing market?