Boom gen­er­a­tion

How baby boomers are cash­ing in on prop­erty

Hertfordshire Life - - CONTENTS - WORDS: Fiona Brand­horst

Buy­ing a prop­erty in your 60s and 70s that will con­tinue to meet your needs in the years to come is a chal­lenge faced by more and more buy­ers as baby boomers come of a cer­tain age.

‘This gen­er­a­tion tend to be prac­tised and ef­fi­cient buy­ers,’ says Bill Spreck­ley of Stacks Prop­erty Search. ‘In the past they have had to fac­tor in work­ing lives, schooling and space for a grow­ing fam­ily, but a prop­erty at this stage of life will gen­er­ally be smaller and its lo­ca­tion can be less re­stricted.’

Re­search by Sav­ills shows the over 50s now ac­count for more than 75 per cent of all hous­ing eq­uity in the UK, worth £2.8 tril­lion (in con­trast, the un­der-35s ac­count for less than six per cent). Many of the older gen­er­a­tion will be look­ing to trade in their fam­ily home and down­size.

Es­tate agent Knight Frank iden­ti­fies in­creas­ing wealth and in­come re­sult­ing in more in­formed hous­ing and life­style choices. Av­er­age UK res­i­den­tial house prices have in­creased by 230 per cent over the past 20 years and long-term home­own­ers are able to re­lease large sums of eq­uity from a down­siz­ing move. This can help pay for higher qual­ity re­tire­ment liv­ing, while ear­lier tax plan­ning can bring in­her­i­tance tax sav­ings for the next gen­er­a­tion.

More than 66 per cent of re­spon­dents to Strutt and Parker’s Plat­inum Gen­er­a­tion hous­ing sur­vey in­di­cate they will use the

‘The over 50s now ac­count for more than 75 per cent of hous­ing eq­uity in the UK’

prof­its from sell­ing their pri­mary home to pur­chase their next prop­erty, with nearly 20 per cent ex­pect­ing to re­lease be­tween £100,000 and £200,000 of eq­uity. Just over a third in­tends to live mort­gage-free, while an­other third en­vis­age spend­ing nearly 30 per cent of their monthly in­come on their next home.

Typ­i­cally, down­siz­ers said they are look­ing to move to a more man­age­able flat (30 per cent) or bun­ga­low (27 per cent), a re­cent Lloyds Bank re­port on empty nesters showed. Only two per cent would con­sider shel­tered hous­ing. The ma­jor­ity of down­siz­ers (73 per cent) ex­pect to make money from mov­ing to a smaller prop­erty and plan to in­vest the ad­di­tional cap­i­tal. When down­siz­ing from a de­tached three bed­room home to a flat or bun­ga­low, down­siz­ers pocket £109,659 on av­er­age.

PwC es­ti­mates that mov­ing from a three­bed­room, mort­gage-free prop­erty to a twobed­room lease­hold apart­ment would save, on av­er­age, £1,530 per an­num, in­clud­ing util­i­ties, in­surance and main­te­nance.

How­ever, Lloyds Bank also showed that nearly a third of empty nesters (32 per cent) say that they are ‘fi­nan­cially com­fort­able’ so have no press­ing rea­son to down­size and one in four (28 per cent) say they need the ex­tra space to look af­ter grand­chil­dren. Two in five (43 per cent) have also made home im­prove­ments, mainly to kitchens and bath­rooms since their chil­dren left, mak­ing a move less likely. Stacks Prop­erty Search adds that buy­ers are plan­ning a life that prob­a­bly has more leisure in it than ever be­fore. For down­siz­ers it may well be a ‘last home’, which is a daunt­ing propo­si­tion in it­self.

‘Try and choose a lo­ca­tion where you al­ready have some con­nec­tions. Es­tab­lish­ing a com­pletely new so­cial life in re­tire­ment, with­out work or chil­dren to net­work, can be dif­fi­cult,’ sug­gests Bill Spreck­ley. ‘You’ll prob­a­bly need fewer bed­rooms, and per­haps a fo­cus on liv­ing and en­ter­tain­ing ar­eas and his and hers liv­ing spa­ces to ease the jour­ney into spend­ing 24/7 with a part­ner. A prop­erty that has good en­ergy sav­ing fea­tures will also rule out un­ex­pected costs when in­come tends to be fixed.’ N

Tem­ple Close, Wat­ford £895,000, Hamp­tons In­ter­na­tional

Ivy Walk, Hat­field £450,000, Coun­try Prop­er­ties

Blue­bell Farm, Sevenoaks, Kent, £1.475m, Hamp­tons In­ter­na­tional

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.