Over 55s wanting to stay in their home rather than downsizing leads to a majority (80%) opting for equity release instead of moving home, according to new research from Standard Life and Age Partnership.
A survey of more than 1,000 UK adults who have taken out equity release shows that 9% said the reason they chose not to downsize was because of the cost associated with moving including stamp duty.
A minority (4%) of those polled chose equity release because they struggled to find another location or property they wanted to move from their existing home to.
Laura Laidlaw, head of customer communications at Standard Life said: “For an increasing number of people, property – often the home they live in – could be the answer to freeing up extra money. Either to supplement income in later life or to gift to loved ones.
“Our research would suggest that the emotional aspect of remaining in your home is what leads many to opt for equity release. A lack of supply, the pressure of moving and the costs of downsizing mean for many, it is not always a practical choice.”
The research also showed that 71% of people claimed the no negative equity guarantee influenced their decision to take out equity release.
All equity release plans which are approved by the Equity Release Council include the no negative equity guarantee which ensures those releasing equity will never owe more than their homes value.
Laidlaw added: “While downsizing can work in both a practical and financial sense for some, the ‘no negative equity’ guarantee means remaining in your home is a viable choice for many looking to use the value of their property to support their lifestyle in later life.
“Having a good understanding of the wide range of available options will go a long way to helping those nearing or in retirement do what is right for them.
“Anyone looking to use their homes for extra income should speak to experts for guidance on what could be right for them.”