Recent research has suggested that the housing market may receive an influx of activity as retirees move home to increase their income.
The survey conducted by Retirement Advantage indicated that 26% of the over 50s asked plan to move home upon retirement. Of this proportion, 62% plan to move to a smaller property whilst just under four in ten (38%) intend to relocate.
Most of those (63%) who are hoping to downsize plan to use the funds for retirement living expenses, whilst one in ten will use the proceeds to help their children fund a deposit on a house.
The desire to move is most popular in London at just under a third (32%) and Yorkshire at 30%.
The plans of those over 50 could have a substantial impact on the property market, given that this demographic hold the majority of UK property wealth – around £2.291 billion.
Commenting on the impact that retirees could have on the housing market was Andrew Tully. The pensions technical director at Retirement Advantage stated that many are thinking about their property in a different way, seeing it as a way to bolster their pension and other savings.
“With the UK housing market showing signs of slowing, questions have been raised over how we can find supply to match demand. This research shows retirees may hold the answer.
“Those approaching retirement are thinking holistically about their finances, and considering property as part of their asset mix. Many will choose to move house so they can use the capital generated to fund the initial stages of retirement, rather than immediately relying on pensions and other savings. It can also make financial sense for retirees given recent regulatory and tax changes around property and pensions.”
He also drew attention to the costs involved in moving, highlighting that other options may be available for those who underestimate the expense.
“…moving house is an expensive business and people are often shocked by how little money is left once they’ve paid for their new house as well as the fees and taxes associated with moving. It’s important over 50s understand there are other ways to use their property to fund retirement. Equity release, for example, allows people to access some of the cash stored up in their home, without needing to move. It is vital people get professional financial advice so they are fully aware of all their options and can get the best outcome in retirement.”
