Almost a fifth (18%) of those over the age of 55 plans to downsize at some point in the next five years in order to raise money according to a report by Key Retirement Solutions.
The report suggested that retirees hope to generate as much as £78,000 by moving out of their current home and into a smaller property.
Of those looking to downsize, almost a quarter (24%) are planning to use the money raised to gift to children, while a further 23% are seeking to downsize in order to reduce financial pressure.
For 19% of those surveyed the cost of running their current property played a key role in the decision to downsize.
While many of those in the over 55 age group are considering taking a step down the property ladder to raise cash, more than three quarters of those who took part in the survey said that they were “concerned or worried” about the process of selling one property and buying another.
“Hassle” was noted as the biggest concern (60%), and expense as the second biggest concern (40%).
While equity release through downsizing is a fairly common occurrence, there are also a growing number of equity release products available on the market that allow the over 55s to release equity from their property while they remain resident.
A separate report by retirement specialist LV=, also released today, suggested that 88% of advisors think that property should factor as a central consideration in planning ahead for retirees, and 78% believe that such products will become more mainstream in coming years.
Steve Lewis head of retirement at LV= said:
“In recent months we have seen several high profile discussions, in the House of Lords for instance, highlight the pivotal role housing equity can play in helping to face the challenges of supporting our ageing population.”
While they may be useful in certain circumstances, it’s important to remember that equity release schemes can also be costly, so careful consideration should be given before pursuit of such options.