Homeowners aim to raise £186 bn from downsizing

The findings show that around 3.25 million households, 13% of working adults, planned to downsize their homes to help fund their retirement with 36% hoping to find a home £57,400 cheaper and 11% looking for a 50% reduction.

Sean Oldfield, chief executive officer of Castle Trust, said: “We know that many people regard property as a good way to save for retirement in fact the Office of National Statistics Wealth and Assets Survey has shown that 60% of people under retirement age think that it is the best way to do so.”

Castle Trust wants homeowners to be realistic about using their home as a source of income for retirement and to consider the risks of relying on a single property rather than a diversified index.

It is offering new investment products called HouSAs which enable savers to invest efficiently in the national housing market via their SIPP or ISA and which provide returns in excess of the Halifax house price index.

Oldfield added: “However your home is not an investment unless you are willing to permanently downsize which only 13% of the population plan to do.”

He explained that only about one in eight people planned to access the value in their home to fund retirement and the remainder heavily undervalued housing as an investment.

Oldfield said: “This is extraordinary when you consider that residential property is the UK’s largest asset class.

“At over £4 trillion it is greater than equities, gilts and bonds combined and it has also historically had the highest risk-adjusted returns of any of the major asset classes.

“For those 13% who are considering part of their home as an investment they should be aware that the value of an individual property can differ greatly from the performance of the national index.”