Housing Asset Strategies for Old Age

Abstract

This chapter focuses on the release of housing equity. The main part of the chapter assembles evidence from a number of sources – including the existing literature and published statistical information, and our household interviews – in order to identify how significant, in terms of usage, the different strategies have actually been. There are two elements to the broad picture. The first is that of a majority of older Europeans benefitting from low housing costs because of the income in kind enjoyed by outright homeowners. The second is that the dissaving of housing assets – gaining income in cash – is probably less common than the LCM would predict: in reality, Europeans tend to hang on to their housing assets. At the same time, there is evidence that attitudes may be changing so that future generations of older Europeans will be more inclined to use their housing equity to meet their consumption aspirations. The final section of this chapter provides further evidence of the use of housing assets by older people through an investigation of early retirement. In practice, the equity built up in housing appears to have provided many with the means of achieving their exit from work, because it provides both income in kind and income in cash, the latter occurring, if at all, just a few years in advance of actual retirement.