We hear a great deal about the first time buyer, and the problems he or she has getting on the first rung of the housing ladder. But what about those who have not only got onto the ladder, but who have reached as high as they want to go – or even decided that it is time to come down a little and downsize?
In other words, what should you be doing if you are ready to buy the home you intend to retire and grow old in?
Should you move again?
Moving means upheaval, but it might be a sound idea worthy of consideration, however to do it now whilst you feel that you can deal with it all could be a good idea. You need to think of your needs now and in the future. A four bed with a large garden might be great if the grandchildren come to stay – but a 2-bed bungalow might be easier to look after in the years ahead. A country location may be idyllic, but it may become a problem if you were no longer able to drive.
You may be fit now but living in a retirement community might mean security for the future – and the chance to meet new friends.
Should you downsize?
A big home may have been essential when you had a growing family, but when your birds have flown, the nest may simply be too large.
Even if the mortgage was paid off long ago, a couple living in a 4 or 5 bedroom house will probably be spending a great deal on its upkeep.
Spending your golden years on housework and DIY maintenance may get steadily less appealing, and the keenest gardener will admit that a large garden means a large workload.
What’s more, if your showpiece home is not a problem now, it is only sensible to realise it could become one in the future. Downsizing – or as it might be better called, rightsizing – could let you move to a home that will be easier to keep up in the future, and which could release substantial equity to fund your retirement.
There could be plenty of cash to release. Last-time buyers looking to make a final move are now estimated to own almost £1 trillion in housing wealth. It could easily mean the difference between an old age spent struggling in a large home that has become a millstone, and a secure and comfortable retirement with plenty of cash.
According to the research from Key Retirement, around 30% of homeowners aged 65 (around 1.45 million) or over would like to move one last time, with homeowners in the North East and South West among the keenest.
However, the process of moving has not been simple. Some homeowners have tried to downsize but have not been able to find the right property in the right area.
Many older homeowners want to stay close to their family and social networks in communities they know. Moving to a new area late in life can make it hard to make new friends.
This is not simply a matter of being too demanding – suitable property may simply not exist. The ageing population has exposed a shortage of properties for people aged 55+ ready to downsize from a family home.
What about the money?
With an aging population, there is a growing need for help with downsizing, and growing demand for government help, with measures such as removing stamp duty for downsizers.
However, property and moving will always be expensive, whether you are headed up or down the housing ladder, if you are short of the funds you need to buy the property you want, you may need help to find a suitable mortgage that reflects your time of life.
If you are considering releasing cash you will need to know, whether releasing capital would impact, for example on your entitlement to means tested benefits or tax situation you may simply need advice on the best way to invest it.
Fortunately, at Continuum we can provide the expertise you need.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Equity release will reduce the value of your estate and may affect your entitlement to means tested benefits
which.co.uk – 1.45 million over-65s face downsizing struggles – 30th June 2018
telegraph.co.uk – ‘Last-time buyers’ own £1 trillion of property but have nowhere to move – 2nd May 2018