According to the data, nearly 30% of over-65s homeowners – the equivalent of 1.45 million owners - are considering downsizing in the next five years to a more suitable home for retirement. However, the potential financial gains from downsizing are not high enough for many and they cannot find suitable homes in their local area.
The numbers looking to move home in retirement rise as high as 58% in the North East and 44% in the South West underlining how many want to swap their family homes for more manageable houses (see table below).
But Key’s study shows they are struggling to move – across the country more than 620,000 over-65s homeowners say they have looked into downsizing but cannot find a suitable home in their area while another 500,000 say they’ve considered moving but would not be much better off financially.
Not being able to move in retirement is a major concern as more than half (53%) of over-65s say keeping up with DIY jobs around the house is physically tough while 27% say they struggle to afford maintenance on their homes.
Just over two out of five (42%) over-65s homeowners have worries about bills and the need for repairs on their home and nearly one in five (17%) say their house is just too big for their needs.
Dean Mirfin, Chief Product Officer at Key Retirement said: “Downsizing should make financial sense for older homeowners as it releases money to pay for retirement and it also should make sense for the property market as a whole as it frees up bigger houses.
But despite the numbers of older homeowners wanting to downsize it is clear they face problems in finding suitable homes for retirement and for many the finances just don’t add up. Unfortunately, that leaves them struggling to maintain homes, and in many cases, struggling financially. Pensioners are sitting on property wealth of more than £1 trillion which could significantly improve their standard of living in retirement and helping them make the best use of that money would boost their finances and the economy as a whole.”
Around 11% of over-65s homeowners questioned say they have already downsized with pensioners in the North West and South East (both 13%) the most likely to have already made the move to a more suitable house.
The equity release market is expanding rapidly and enabling retired homeowners to cash in more than £3 billion of property wealth a year and stay in their houses with customers releasing an average £77,380 of property wealth rising to nearly £134,000 in London and £91,000 in the South East.
