By 2019, there could be more than £550 billion worth of property up for sale across the pond, according to a report in The Scotsman. This is because an estimated four million people currently in their 50s and 60s are relying on using their home to top up an average pension shortfall of £70,000, according to a report carried out for insurance giant Prudential.
However, Boomers may not be able to rely on as much money from a home sale as they would like. That is because as Boomers will be looking to downsize their abodes, they will drive up the market for the smaller properties that will be in large demand from not only retirees but also first-time home buyers. Thus, the retirees will get less for their current home and pay more for their new digs.
“This would take them further and further away from their ideal retirement, to homes that were smaller, in worse condition or in worse locations than they either desired or may be suitable for people in retirement,” cautions David Parry, author of the report.
To this, Ali Crossley , of Prudential says Boomers should not rely on the sale of their current home to help them through retirement. “The message is clear – planning to simply sell your home to release equity for living expenses in retirement is a gamble.”