For those who didn’t manage to save enough to fund their retirement, or find their existing home is too big and expensive to run, downsizing can be the answer. You sell your home, move to a cheaper one and live off the money you’ve made.

However, recent research¹ has shown that there is a shortage of small properties, making it harder for retirees to downsize. In parts of the country there are double the number of four-bedroom properties available compared to two-bedroom homes.

Cambridge and Rugby were found to be the worst affected areas, where there were three four-bed houses for every two-bed. St Helens, Hull and Sunderland topped the list of areas where two-bed properties outnumbered four-beds.

Knock-on effects

The think-tank Demos² has estimated that at least 30,000 new retirement properties are needed, just to meet current demand and believes that building more properties specifically designed to meet the needs of older, retired people would have significant implications for the housing market.

Older couples staying put in large family homes reduces the supply of property available to younger families looking to move into houses that would give them the growing space they need. A shortage of supply also means that prices continue to remain high.

The research shows that 3.5 million people aged over 60 were interested in buying a retirement property.

Making the right move

It makes sense to look at the costs involved before you make your move to ensure it will be worth it in financial terms and think too about the impact it might have on your family, your leisure activities and your social life.

¹Responsible Life, 2019
²Demos, 2017

Although you may have purchased a property, how much of it do you actually own right now? It’s estimated that at point of purchase the average UK buyer in effect, owns the equivalent of the kitchen and a bathroom.

Thinking of moving?

If you’re contemplating your next house move, then you’ll need to work out how much equity you have, the amount of your existing property you own. To make a rough calculation, you’ll need to know what your property is currently worth, and subtract the amount of mortgage you have outstanding. So, if you have a property valued at £300,000 and your outstanding mortgage is £175,000, then your equity is roughly £125,000.

Knowing what equity you have will help you decide how much you can afford to spend on buying your next property. If you’re thinking about moving, then it makes sense to talk to us, as we can help you calculate the amount of mortgage you’ll need, give you an indication of the interest rate you’re likely to be charged, and help you make your application to the right lender.

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.