Poor performing pensions are forcing home owners and buy to let landlords to look at raising extra cash for retirement from property, according to a new survey.
Thousands of over 55s approaching retirement are looking at different ways to unlock cash from property, says the report by the Equity Release Council (ERC).
Nearly two-thirds of over 55s (61%) believe property will play a major part in providing retirement cash – with 17% renting buy to let or holiday homes and 7% selling second properties.
The most popular strategy most over 55s intend to rely on is downsizing (45%) – but another report from the Royal Institution of Chartered Surveyors (RICS) forecasts this might not be a realistic option.
RICS say the average age of first time buyers is rising and buyers have problems raising mortgages and saving the significant deposits required by lenders. These problems are stagnating the market and could last for some years, predicts the trade body for property professionals.
Besides downsizing, retirement savers are considering other ways to make money from their homes, including renting out rooms (10%) and unlocking cash with equity release (7%).
The ERC is looking at how to encourage more homeowners to take advantage of equity release as many more inquire about borrowing against the value of their property (55%), than sign up for plans.
Over 55s also have other retirement income options, including employer pensions (44%), private pensions (39%) and savings and investments (36%).
Nevertheless, more than a quarter (27%) intend to rely on state benefits because they have inadequate retirement savings.
Nigel Waterson, chairman of The Equity Release Council, said: “This research clearly shows that more and more people are considering using their property as part of their retirement finances. This might mean choosing to downsize, rent a room out or use equity release in any combination.”