One in five downsizers use equity release instead

Ryan Bembridge

June 13, 2017

One in five would-be downsizers are changing their minds and taking out equity release instead, Bower Retirement research shows.

Many (55%) are changing their minds due to the cost of moving, while two in five (43%) could not find a suitable house to move to.

Andrea Rozario (pictured), chief corporate officer at Bower Retirement, said: “Downsizing is logical and sensible and can work for some over-55s homeowners but only if they can find the right house at the right price.

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“But there are financial issues to deal with when moving house with stamp duty alone costing 5% on house prices above £250,000 which can make the decision to move uneconomic. Buying a £300,000 home would cost around £5,000 in stamp duty.

“It is also not just a financial calculation as there are emotions involved when moving home with the risk of losing touch with family and friends making downsizing seem a bad idea for many.”

Due to a slowdown in house price growth, as prices have fallen for three months in a row to May according to Nationwide, 17% of equity release customers are having their homes valued at a lower price than expected.

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