One in five downsizers use equity release instead

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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.

“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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Written by: Houseladder