Who are last-time buyers, and what challenges do they face?

13th June 2018

The name ‘last-time buyers’ probably gives a lot away about who fits into the category. They are people who are planning to buy a home to live comfortably in during retirement, and potentially for the rest of their lives.

Last-time buyers face different obstacles and challenges to first-time buyers and even second steppers (those moving from first to second home). This is largely due to the type of home they want to move into, as well as the reasons behind doing so.

For most last-time buyers, the reasons behind buying a new home are varied. According to research from Legal and General, these include:

1. Releasing equity

Increasing the amount of cash available in later life is a top priority for many retirees, and research from Retirement Advantage shows that this money is often earmarked for:

  • Home and garden improvements (48%)
  • Paying off mortgage debt (37%)
  • Consolidating existing and unsecured debts (28%)
  • Funding a holiday (22%)
  • Giving financial gifts to relatives (16%)
  • Helping younger generations to buy their first home (3%)

2. Physical downsizing

Some retirees may simply be looking to move into a home which is more suitable for their physical needs than where they currently live. That might mean:

  • A bungalow and a lack of stairs
  • A smaller house which is less demanding to maintain and clean
  • A smaller garden
  • A purpose-built retirement property designed around the needs of later life

3. Financial downsizing

Moving to a home which is more affordable may be necessary for retirees who want to make their retirement income go further. However, it is likely that it will not be possible to downsize financially without also moving into a smaller property.

Moving to a smaller home is likely to help with all the above aims in some way. This makes it almost the exact opposite of the journey facing first-time buyers and second-steppers, who are usually looking for a larger house to suit their needs and expect their costs to increase accordingly.

Last-time buyer challenges

Although the situation seems completely reversed in comparison to first and second-time buyers…

Finding the right property: Much like any other group of people looking to buy their next home, last-time buyers have a set of specific attributes in mind and many don’t want to compromise on them. According to Legal and General, the ideal property for a last-time buyer has two bedrooms and is located close to friends and family. 13% are looking for a dedicated retirement development, which could significantly narrow down the search.

Attachment to current property: Many last-time buyers know that buying a new home will be the right move for them but have reservations about giving up their current property. There are three main factors at play here:

  • Sentimental attachment: The memories you have in the property can make it hard to leave behind
  • Wanting to leave the property as inheritance: Which you can’t do if you sell it, but you can still leave cash
  • Not wanting to leave the current area: That might be due to community ties, knowing your neighbours and feeling safe

Finding the right time: The research shows that more than half of over-55s looking to downsize their home are waiting until they turn 70 to do so. This means that, while they have more time to plan and make the transition as smooth as possible, the risk of changes in their personal circumstances and the housing market need to be considered.

What is the answer?

Financial planning and advice can go a long way toward bridging the gap between your retirement goals and your current situation. By taking to a professional, you can get a fresh perspective on your current situation, as well as benefiting from the increased confidence from having an experienced adviser or planner on your side.

The suggestions and solutions offered by a professional will be tailored to your needs and will introduce new options which you may not have thought of, making the journey toward finding your perfect retirement property easier.

For more information, or to get started, please get in touch with us.