No plans to downsize for majority of over-55s

A recent survey by Nationwide Building Society reveals that only a third of over-55s plan to move to a smaller property in retirement. Just 36% of the 2006 adults aged 55 or over said that downsizing was an option, while more than two-fifths (43%) said that they never plan to move again.

The survey found that needing the space was the main reason for 49% of respondents’ decision not to move, with the need to host family, store a lifetime’s worth of possessions and even room to pursue their hobbies among the reasons given.

Furthermore, 43% of the over-55s polled revealed that where they’d put down roots was important and that they didn’t want to leave their home location, while 18% said that being based near family was a good reason to stay.

For those who said that they would consider downsizing, the majority (56%) admitted that this was because a smaller house could be more easily managed. However, 73% of respondents said that if they could stay in their present home, they would, while over a fifth (22%) say that they will be relying on family to help them out with maintaining the property.
Jason Hurwood, Nationwide’s director of home propositions, said: “The perception that all older people want to downsize to much smaller properties is outdated and cliched. As the research shows, people aged 55 and above are putting off the traditional downsizing house move, with space being very much in demand for a range of reasons – from entertaining friends and family to allowing them to keep and store valuable keepsakes and belongings. However, remaining in a larger property may have financial implications in later life, from mortgages to maintenance.

“With many retirees being property rich and cash poor, planning for the additional costs that may be needed is essential. Nationwide offers a range of Later Life Lending options as we are seeing more demand from older people to realise money through their homes – from unlocking the value to fix long-standing maintenance issues, from creating new space to updating tired rooms or from helping adapt the property for old age to taking their mortgage into retirement.”

Moneyfacts own research reveals that the number of retirement interest-only (RIO) mortgage products has increased from just 29 in February 2019 to a range of 68 today. In addition, several lenders have increased the maximum age that they will consider a mortgage against – no doubt recognising the growing number of over-55s who still require access to the mortgage market. Together, this would seem to indicate that the market is reacting to the changing needs of older customers and especially those who are considering moving or remortgaging later in life.

Another topic that might be affected by the majority of older homeowners deciding to stay put is equity release. As this allows people to unlock some of the equity they have locked up in their homes it’s likely that a prevalence of people who are choosing not to downsize is potentially good news for equity release providers.