While 43% of older homeowners have moved to a smaller property to unlock money tied up in their home, 20% of downsizers felt disappointed with their overall return after legal feeds, moving costs, and other expenses.
Once the associated costs of selling up and moving are taken into account, the average downsizer ends up with approximately £105,900 from the sale of their property – £28,650 less than anticipated. In addition to receiving less than expected, nearly half (48%) say that the expenses from fees, stamp duty and moving and renovation costs accrued to more than they bargained for and they overspent by £12,480 as a result.
While some underestimated the costs involved in moving, others thought they would make more from the sale of their property, which meant they felt short-changed after the move. Of those who made less than expected from downsizing, one in 10 (10%) had to reduce the asking price as a result of a difficult housing market and a further 57% accepted an offer lower than the asking price.
Releasing money for retirement was a key reason for downsizing, with one in five saying that they felt like they had no choice but to downsize in order to boost their pension income, although of these, one in four (25%) were sad to leave their old home behind and more than one in ten (13%) would have preferred to stay in the same home given the choice.
Nici Audhlam-Gardiner, Managing Director of Lifetime Mortgages at OneFamily comments:
“It’s great that many people now have longer active retirements, however they come at a cost and many pensions won’t stretch far enough. Many retirees feel they have no choice but to downsize but advisers play a key role in helping them understand there are different ways of releasing capital to help fund later years. Its unsurprising that many people don’t want to move as they will have got their home just as they like it, and moving to a new house is often stressful and expensive."
