Baby boomers who hope to use their homes to form part of their pension by downsizing could unleash housing havoc on the market, according to Prudential.
Its report, entitled, Equity Release in the UK, suggests that four million homeowners are relying on property to boost their retirement income which is predicted to suffer a shortfall of £70,000 per person. The baby boom generation, aged between 50 and 60, currently holds almost £570bn in home equity.
The report says the housing market will be turned on its head as first-time buyers and baby boomers will be fighting for the same properties and predicts that FTBs will lose out as they struggle to compete with cash-rich retirees.
The study predicts an increase in demand for smaller properties typically favoured by FTBs, causing the price of these homes to rise while an excess of bigger properties will mean that the prices of threeand four-bedroomed homes will fall.