Estate agents are reporting a surge in inquiries from customers wanting to downsize to raise cash but warn that unrealistic sellers are struggling to find homes, a new survey has found.
The research by equity release referral service by Key Partnerships shows that more than two out of five (44%) estate agents have seen a rise in inquiries from older homeowners looking to downsize in the past year.
However 62% of estate agents warn would-be downsizers have unrealistic expectations about how much they will raise from moving to a cheaper home – and that’s if they can find one.
More than half (56%) of estate agents say there is a shortage of homes on the market suitable for downsizers and 68% warn there are not enough homes available for older buyers who are less mobile.
Key’s research found estate agents are increasingly suggesting lifetime mortgages as an alternative way to raise money for downsizers – around 44% of estate agents say they regularly suggest equity release plans which enable customers to take out money while staying interest-free in their homes. Meanwhile mortgage experts are warning of a slowdown in the housing market – the Council of Mortgage Lenders says the housing market has “stalled” with the number of home movers falling by 9% in the past year.
Will Hale, director of Key Partnerships, said: “When downsizing works it can be an ideal solution for older homeowners but sellers need to be realistic about how much they are going to make and it appears many are struggling to find suitable homes.
“The shortage of homes for sale is pushing up prices for downsizers who may struggle to raise the sort of money they are expecting to help with retirement planning while also having to go through the upheaval of moving home.
“Equity release should be part of all conversations with older homeowners considering downsizing, when for many it simply doesn’t add up. Estate agents who can offer equity release as a potential alternative are able to benefit from an additional revenue stream by referring potential clients to a specialist.”
