What is downsizing?
Downsizing is the process by which homeowners choose to move to a home that is more suitable to their financial means and release equity on the way. By doing this, they have a more manageable home and a lump sum to invest in their future.
There is a new breed of homeowner these days - too young to contemplate lifetime mortgages yet old enough to be thinking about their future financial security. When the usual routes of releasing equity in your home are not a viable option due to your age, where does that leave you? Are you living in a home that is far too expensive for your financial means?
Recent research suggests that many people in their fifties and sixties are starting to turn the housing market on its head, with some four million seeking to sell the ‘family home’ and buy smaller homes to release funds for retirement. Of course, selling the family home after your children have grown up and moved on is not new. However, on paper, retired people are richer than ever.
The Council for Mortgage Lenders says homeowners aged 65 and over hold as much as £460 billion in un-mortgaged equity - a level of wealth that is unlikely to be repeated. What do they do with the money they release? They travel the world, have fun and feel free again.
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