Where downsizers can unlock the most (and least), why 26% of sellers have been gazundered, and more. Annabel Dixon runs through what you need to know in the world of bricks and mortar.
Had a busy week? We know the feeling, so we’ve cherry picked five property-related stories that have hit the news in recent days.
Downsizers can free up more than £1,200 a month (but beware the north-south divide)
Sitting pretty after years of house price growth? You could give your retirement pot ‘a significant boost’ by downsizing, according to a report from Savills that won’t do anything good for the tension between Baby Boomers and Millennials in the great house price debate.
Its research shows that homeowners across England and Wales could unlock an average £305,090 by downsizing from a four-bedroom home to a two-bedroom one.
Based on the assumption that the average 65-year-old could live for another 20-odd years, that property windfall works out at £1,218 a month tax-free for the rest of their life.
Lucian Cook, head of residential research at Savills, says: ‘Those approaching, or having already reached, retirement age have been some of the biggest beneficiaries of house price growth.
‘By moving to a property that better suits their needs, downsizers — particularly those in high value locations — can give themselves retirement funding a significant boost, particularly vital in the face of rising living costs.’
But before you hoist a ‘For Sale’ sign on your house, it’s worth noting that the gains are not evenly spread across the country. Cook says the analysis ‘lays bare the north-south divide’ when it comes to scaling down.
Homeowners in London could free up the most equity by downsizing, releasing £2,523 a month. That’s three times more than those in the north east, who could unlock the least, at £826 a month. Londoners are followed by homeowners in the south east, who could generate £1,485 a month by downsizing.
‘Those who live in typically more affluent areas in London and the south east have the option to use housing equity to make a meaningful contribution to retirement income, despite typically having slightly longer life expectancies,’ Cook explains.
‘For those in the Midlands and the north there is far less to be gained by downsizing and they’re therefore likely to leave downsizing until later in life, if indeed they downsize at all.’
A quarter of sellers gazundered
No seller likes to have a buyer chip away at the price they’ve agreed. But it’s been an all-too-familiar scenario lately if Open Property Group’s research is anything to go by.
A quarter (26%) of sellers have been gazundered in the last 12 months. And a third of those were subjected to it in the fortnight before they were due to exchange contracts, according to the quick sale firm.
Open Property Group’s survey of 1,001 people who have sold a home in the last year shows that the main reasons for chipping the price were issues thrown up by a property survey (35%) and buyers ‘chancing their arm’ (24%).
A whopping 78% of gazundered sellers accepted the lower offer, a sign of the buyer’s market that Zoopla reported last year.
Gazundering is ‘certainly more prevalent in cooler market conditions, such as those we’ve seen develop over the last year,’ explains Open Property Group CEO Jason Harris-Cohen.
We’re only a few weeks into 2024 but could an improving picture in the housing market keep a lid on gazundering?
And in other news…
- Selling a home in the UK takes almost three times longer than it does in the US. The UK is ‘by far’ the slowest place to transact (183 days), followed by Spain (152 days). Meanwhile, the best place for a quick sale is the US (69 days), followed by Canada (90 days). Home Sale Pack analysed the average time it takes to offload a home in 10 of the world’s busiest housing markets.
- Rental growth in January was at its slowest pace for 13 months and was in single digits for the first time in six months, according to Hamptons. Average rents on new lettings across Britain climbed 8.3 year-on-year. ‘While rental growth is slowing from record levels, it’s set to remain sticky, running ahead of inflation for the remainder of 2024’, the estate agent says.
- Asking prices of homes listed for sale this month have climbed £3,091 (0.9%) to £362,839, according to Rightmove. It follows six months of annual price falls. The number of sales agreed as well as buyer and seller activity are also up on last year.
Housing market expectations for 2024 are improving. Here’s why.
Temperatures may be falling outside but the housing market appears to be warming up. Annabel Dixon lifts the lid on
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The inside track on London’s high-end housing market, how buyers are bagging an £18k discount off their next home, and
Over 65s in Britain sitting on £2.7 trillion worth of property — yet many are struggling to downsize
Despite choppy economic waters in the housing market, their main motivation for upping sticks are lifestyle factors, according to Savills.
