As the economy begins to recover it appears to be prompting home owners to sell off their houses after years of waiting.
According to a recent article in the Sunday Times about home moving the older homeowners are putting their properties on the market after years of holding on.
According to research released by Prudential more than 2m homeowners aged 55 and over plan to downsize in the next few years freeing up on average £85,000 of equity each.
Anna Mikhailova a journalist for the Sunday Times recently reported nearly £1 million of equity in residential property is owned by the over-65’s. She wrote according to Savills the most popular reason for downsizing is to buy property that is easier to manage followed by lower running and maintenance costs. Downsizers are often moving home from the country side to an urban location with more conveniences on their door steps. New build property is appealing to more than 50% of this group. Lucien Cook from Savills said this trend could have a positive knock on effect for the whole market by encouraging new build developments. If an additional 2% of the over 60’s downsized each year to a new build homes this could increase house building by 40,000.
Mikhailova quotes David Adams from the estate agent John Taylor saying, “with the possibility of mansion tax and the Liberal Democrats pushing for a 1% levy on £2m + homes. Downsizers with homes worth £4m-£5m are looking to sell and or replace them with two properties. Both less than £2m to avoid any possible tax issues.”
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Source: Original article by Anna Mikhailova. Sunday Times 25/05/2014