Downsizing your home as you get older is a common step. If it’s something you’ve been thinking about, there are great reasons to take the leap. Yet, research also suggests many people don’t go through with their plans, so being aware of the potential challenges is important too.
According to research from Key, almost 3 in 10 over-45s say they plan to downsize in the next five years. The responses find people believe 66 is the ideal age to downsize as they reassess their lives and plan for retirement.
If you’re planning to sell your home and purchase a smaller property in the future, there are positive reasons to do so, including these three.
1. It could release money to fund your retirement
One of the most common reasons for downsizing is it can release capital that you can use to fund retirement.
Selling your current home and purchasing a cheaper property could mean you have far more financial freedom. According to Land Registry, the average property in the UK is worth more than £285,000. So, you could have the potential to unlock thousands of pounds through downsizing.
Of course, there are costs that you’ll need to factor in if releasing money is a key priority. You’ll not only need to purchase your new home, but pay for things like conveyancing bills, a property survey, Stamp Duty, and other costs associated with moving.
2. You can purchase a home that suits your long-term needs
As you get older, your needs may change. Downsizing can be a chance to reassess what you need in a property, and purchase one that you can comfortably manage in your later years.
Choosing a bungalow to avoid stairs is one of the key things many people downsizing look for. But there are other considerations too. How easy will the property be to maintain? Is your bathroom large enough to be adapted for mobility issues if needed in the future? By downsizing, you could choose a property that better fits your current needs.
3. It’s a chance to move to a location you want
Downsizing after you’ve retired means you have far more freedom when choosing a location. Now you don’t have to commute, where do you want to live? Perhaps you’ve been wanting to escape to the countryside, or dreaming about a property that’s on the coast?
It’s a chance to choose a location that reflects the lifestyle you want to enjoy.
Just a third of people planning to downsize go through with it
While many people consider downsizing, the Key survey suggests just a third of people will make the leap.
Understanding the reasons why homeowners change their minds can be useful when you’re deciding if it’s the right decision for you.
23% of people said they didn’t downsize because they are attached to the community. If leaving your current home would mean moving away from family, friends, and other local groups, it’s something you should think carefully about. A sense of community is important for many people and could help you get the most out of retirement.
Of course, moving away doesn’t mean you can’t find a community spirit in your new home, but it’s something to consider when you’re searching for the right property for you.
Despite downsizing often being a way to access property wealth, 16% said they decided against moving after realising they wouldn’t benefit financially. A smaller property doesn’t necessarily mean it will have a lower price tag, and the survey estimated the cost of moving is £9,611.
So, if plans to downsize are driven by finances, you should do your research first.
With two-thirds of homeowners deciding to remain in their current home, you should ensure it will continue to meet your long-term needs. Remember to factor in any renovations or projects you’d like to take on when weighing up the potential pros and cons.
Contact us to discuss mortgages
If you’re planning to move and will need to take out a mortgage to purchase your next home, contact us. We can search the market on your behalf to find a suitable deal and offer guidance throughout the application process.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.
