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Pension shortfall - equity release or downsizing - which would you consider?

September 14th 2018
By: Melanie
Pension shortfall - equity release or downsizing - which would you consider?

Homeowners over the age of 55 are increasingly using equity release to invest in a Buy to Let. BTL investments over the past few years have historically given good returns on investments, even since the tightening on regulation and legislation concerning BTL properties they can still give good returns. According to Telegraph Money more people over the age of 55 are considering this an option to top up pension shortfalls as well as releasing money to help their children to get on the property ladder. Almost £10 million of housing wealth was taken from UK property in the first quarter of 2018.1

Another popular way to unlock equity from a property is to downsize, 5.7 million people would move to a smaller home if they could find a suitable one. The Independent estimate that 11 million people will downsize in the next 20 years.2

People who are 65 or older were looking on average to release around £80,000 so that they could add it to their pension pot. Many of the industry experts such as Estate Agent today suggest that the Government should cut stamp duty for pensioners looking to downsize to encourage them to move and therefore release some of the larger housing stock for family buyers 3

The UK is a country with a rapidly increasing ageing population and it is estimated that as many as 2.8 million bedrooms are currently unused in pensioners properties. It is largely felt that the Government could solve this problem by giving older people incentives to move by introducing tax cut measures. If you are looking to downsize how about this semi-detached chalet bungalow is located in a popular location on the edge of Saffron Walden. The property requires updating throughout and is offered for sale with no onward chain. The accommodation includes, two reception rooms, conservatory and kitchen, whilst on the first floor are two bedrooms and a bathroom. EPC Band E. Contact Intercounty Saffron Walden on 01799 522641 or follow this link. Price £340,000.

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If you are looking to release some equity in your home what would you consider? If you would like some more help or information about BTL property or smaller homes suitable for downsizing then why not pop into your local branch of Intercounty or call our team on: 01279 713733.

Readers might also be interested inThe advantages of downsizing

Sources:

1.18.04.18 - https://www.telegraph.co.uk/equity-release/mortgages/over-55s-look-ease-pension-fears-releasing-cash-home/

2. 02.08.17 - https://www.independent.co.uk/money/spend-save/uk-pensioners-downsizing-smaller-homes-11-million-retired-housing-market-a7872351.html

3. 15.08.18 https://www.estateagenttoday.co.uk/breaking-news/2018/8/stamp-duty--now-theres-a-call-for-down-sizing-pensioners-to-be-exempt?source=newsticker