Homeowners aged over 55 looking to buy again

Nearly four in ten British homeowners aged over 55 are looking to move house again at least once, new research reveals.

Data from an investigation conducted by insurance firm Prudential shows that 37% of over 55’s are intending to move, which will amount to three million future transactions worth more than £775bn.

Purchasing preferences

Despite some predictions, the desire of many to move is not directly linked to the new pension freedoms, with just 14% saying they wanted to move as a result of the changes.

Investment was also found to be popular with the over 55’s. 18% of those plotting another house purchase said that they would not be living in this home, but would favour buying second homes, buy to let properties or homes for relatives.

In monetary terms, Prudential’s research indicates that the average maximum purchase price for the over 55’s next property was £250,000. 20% of people in this age bracket said that they would be willing to spend £350,00 on their next home purchase.

A large majority of 83% said that they felt their next property deal would be their last, but 11% said they would probably buy again in the future.

Homeowners aged over 55 looking to buy again

Pension push?

‘There was a lot of speculation that the pension freedoms would spark a rush of over 55’s investing in buy-to-let property as a means of generating income in retirement,’ said Stan Russell, retirement expert at Prudential. ‘However our research suggests that this hasn’t yet been the case.’[1]

Russell believes that, ‘in fact, the process of withdrawing cash from a pension fund to purchase property and potentially generate an income is complex and could result in a large tax bill.’ He said that, ‘anyone aged 50 or over with a defined contribution pension is entitled to free and impartial guidance from the Government’s Pension Wise service, and many of those considering accesing their retirement savings under the new freedoms would benefit from a consultation with a financial advisor.’[1]

The biggest motivation for over 55’s to move home was found to be to downsize, with 43% citing this as the main reason. ‘Using money raised from a property sale could prove to be a helpful boost to retirement income for some,’ explained Russell. However, he feels that, ‘it’s no substitute for starting to save as early as possible to prepare for eventual retirement.’[1]

Of those looking to buy another property, 29% said they expected to pay more than the price of their current home. 27% said they would look for a cheaper place.

[1] http://www.propertywire.com/news/europe/uk-older-home-movers-2015090310938.html