A greater number of people in the UK are now looking to downsize their properties as a way to make sure they have enough money to fund their retirement, which could open the door for an increasingly popular asset class.
According to a study from retirement finance specialists MGM Advantage, 12 per cent of people who are at retirement age are looking towards this as an option, with the potential for this to unlock some £136.5 billion of housing equity in the process.
It means that some 1.36 million people of retirement age are looking to move to smaller houses in order to unlock the equity in their own properties. This could open the door for the ever-more popular care homes market, where purpose built complexes allow older people to live as part of a community, independently but with help at hand, in high-quality purpose-built accommodation.
The rise in demand that could be created by almost 1.4 million people looking to move to smaller homes could certainly mean more demand for this type of asset from investors.
“People often refer to their property as their pension, and these numbers show that many are considering downsizing to provide an income boost in retirement,” said Andrew Tulley of MGM Advantage.
And it’s not just those who are looking to downsize who could prove a captive market for care homes, with the findings from the company also stating that as many as 18 per cent of people who are retired, or just under two million people, have already sold their own home as a way to downsize.
Older people who retire now are also getting more money for their sale, with the statistics showing that the average equity release that comes from downsizing now stands at £102,851. This is an impressive 18 per cent higher than just a year ago, and such a jump in value could prompt more old people to sell their houses and look to move elsewhere.