Downsizing may not be the best option for many over-55s despite the fact that they are sitting on a combined £1.9 trillion-worth of equity in their homes, according to new research.
SHIP, the trade body for equity release, looked at 25 local authority areas with a high density of over-55s and found that in almost a third of cases potential downsizers would either be worse off or not release sufficient equity to make moving worthwhile.
The financial calculation is based on the difference between the cost of the average home in the area and the average home occupied by over-55s and on moving costs including stamp duty and solicitors’ fees.
The top three areas where downsizers would be worse off are Herefordshire (£43,000 worse off), Poole in Dorset (£40,000) and Worcestershire (£32,000).
However, the sums stack up differently in other areas. Downsizers could gain the most in Torbay (£61,000), North Lincolnshire (£59,000) and Redcar and Cleveland (£58,000).
In areas like Devon (£6,000), Cumbria (£12,000) and West Sussex and Cornwall (£13,000), the potential gains may not be enough to make up for the upheaval of moving.
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