Abstract

The ageing of European societies, the mounting pressure on pension systems, the rise of home ownership and the growth in house prices have sparked interest in housing equity release options and strategies. Much of the available literature approaches this topic through a financial lens, focusing on equity release schemes as a way to free up housing equity while remaining in the dwelling. However, there are also other ways in which housing wealth can be extracted, such as downsizing, moving to a rental dwelling or subletting part of the dwelling. There is very little recent international comparative insight into the perceptions and preferences of older home owners with regard to this matter. Which housing equity release strategy do they prefer and why? And to what extent is their decision to release housing equity influenced by the bequest motive? Based on focus group research in six European countries (Germany, the United Kingdom, Ireland, Hungary, Italy and the Netherlands), this paper observes some general trends and identifies a number of country specific variations.

Highlights

  • Much of the wealth that individual households possess is stored in the owner-occupied house

  • The research findings that are discussed in this paper are the result of focus group research in which housing equity release-related topics were discussed with a group of predominantly older home owners

  • The goal of this paper was to assess the attitude of older home owners towards the different forms of housing equity release, as well as towards the bequest motive

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Summary

Introduction

Much of the wealth that individual households possess is stored in the owner-occupied house. Older home owners, who usually have completely or largely paid off their mortgage, tend to have a substantial amount of equity accumulated in the dwelling. It may be attractive or even necessary for them to release part of this housing equity in order to supplement the retirement income. The idea of asset-based welfare has gained currency in the housing domain

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