The over 65s are a very happy bunch! The Office for National Statistics recently found that retirees are the most satisfied with their lives.
Without work or other commitments older people have more time to spend on recreation and spare cash to refresh their homes, as well as visit hotels and restaurants – all things that have been said to improve life satisfaction levels. One of the things that more retirees are doing to enjoy their lives is releasing capital in their homes.
In April the Equity Release Council highlighted that nearly £1billion was withdrawn by over-55s through equity release in the first three months of 2019, a rise of 8 per cent compared to last year.
The industry body for the equity release sector said 20,400 customers borrowed against their homes, with the average customer taking out a lump sum of £97,763 to fund everything from home extensions to helping grandchildren get on the property ladder.
It can be a great idea to use the capital built up in your home to spend making the most of your retirement. Improving your home and helping family get on the property ladder are something that many retirees wish to do.
As is enjoying a few extra holidays a year and spending more time on hobbies. After all people have worked hard all their lives with limited leisure time – so why not spend it now doing the things they love!
Releasing capital through equity release is obviously one option that suits some people. The other is selling up and downsizing. We are finding more people are choosing this option and deciding to downsize and rent, rather than just buy another property.
A recent study from Retirement Villages also highlighted that over half of over-55s said they would consider renting a home and 48 per cent would rent with a friend.
Renting has many benefits. It can make people financially better off and give people access to the capital in their home, without paying interest, like many people have to do when taking out equity mortgages.
Once they have this capital they can choose to invest and earn money on their savings. They also have a lump sum that can be spent on things like home improvements or helping family.
With renting there aren’t any stamp duty costs to pay either. These can be quite substantial in popular parts of the UK, as even smaller properties can command a hefty price.
Of course we understand that in the UK home ownership is part of our DNA. It can be hard for people to let go of this concept. But what we’ve found is this is usually because renting can appear just a temporary option and there is always the fear that a landlord could ask you to leave at any stage.
This doesn’t have to be the case. With our retirement properties for example most come with assured or ‘lifetime’ tenancies, as opposed to assured shorthold tenancies that rentals usually come with.
What this means is that people can stay in the property as long as they want, giving people the same security of tenure as they would have if they owned their home. We find once people know that this is an option renting becomes a far more viable and attractive possibility.
Other benefits to renting include being able to move to a more manageable sized property, perhaps in a completely new location, saving on bills and enjoying access to a ready-made community of people.
In essence people can just get on with living and enjoying their retirement! Whilst renting won’t be for everyone there are many benefits, so it’s just a question of weighing up what is right for you.
If you’ve been thinking about downsizing and renting sounds like a good
option why not give us call? We’d be delighted to explain more about how it all works and let you know about properties we currently have available. Please give us a call for free 0800 525 184.
