Older homeowners are unrealistic about how much money they will raise from downsizing, and estate agents are warning them to manage their expectations.
That's the claim from an equity release referral service, Key Partnerships, in a survey it has conducted of estate agents across the country.
The exercise revealed a growing number of agents seeing would-be vendors wanting to sell their property to downsize, with some 66 per cent of agencies reporting a rise in such enquiries over the past year. Most of the enquiries came from vendors aiming to clear outstanding mortgages or to actively release funds for their retirement.
However, the equity release firm also claims agents are warning would-be sellers against overestimating how much they will make as a result of a sale; it says 72 per cent of estate agents say older homeowners have unrealistic expectations.
The major reason, it says, is a lack of suitable homes for downsizers which is forcing up prices of the properties to which they downsize.
Key’s research found 85 per cent of estate agents believe prices for suitable homes for downsizers such as bungalows, retirement homes and houses suitable for the less mobile are being pushed up by lack of supply.
The research found 42 per cent of agents regularly recommend equity release plans.
“Whilst as an estate agent selling houses is the major revenue driver, where the economics don’t work from downsizing, clients will simply withdraw their properties from sale. Agents who increasingly discuss equity release as a potential alternative are able to benefit from an additional revenue stream by referring potential clients to a specialist” says a spokesman for Key.