Downsizing makes sense for many homeowners who are either living in family homes which are too big and unmanageable or need some extra cash for retirement.
But the decision to move to a smaller property, leaving a much-loved home, full of memories can often be a difficult one. And with so many other financing options available through the later life lending market, including equity release, the decision to downsize can these days be a lot more complex.
For many, downsizing is, quite simply not an option. Remaining in the current home close to family, friends and other support networks can far outweigh any financial or practical benefits, especially as we recover from a pandemic.
But, for others, the lure of a home which is easier to manage, cheaper to run and the purchase of which might free up some cash, is highly attractive.
The pandemic has also made certain types of property more alluring to those approaching retirement.
Indeed, Scott Clay, distribution development manager at specialist lender Together, said: “We are finding that downsizers, particularly older homeowners, are looking for retirement apartments, with gardens and ample outside communal and recreational space, the benefits of which were highlighted during lockdown when people were confined to their own homes and gardens.”
However, he revealed it was location which remained the ‘most crucial factor’ for downsizers. “The big challenge is that the UK simply doesn’t have enough suitable properties in the places where they want to be,” he said.
“So, until changes are made to encourage them to move out of family-sized homes to make way for the next generation, there will continue to be intense competition for these types of properties.”
To help anyone currently giving thought to downsizing, Scott has flagged up a few points for you to consider first.
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Do you need to tap into the equity in your home?
One of the main reasons people downsize is financial. Sunlife data shows the average over-55 has around £135,000 equity in their home, which could help with living costs. What’s more, it could also help you make the move to be nearer grown-up children and grandchildren, said Scott.
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Can you afford the bills and upkeep?
The bigger the house, the more you’re likely to be paying on general upkeep, repairs and monthly bills, Scott explained.
He added: “Expenses like council tax and utilities are likely to be lower for a smaller property, so you could find that downsizing saves you money month-by-month, as well as freeing up a chunk of cash from the equity you’ve built up in the property over the years.”
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Does the space in your current house work for you – both now in the future?
We need different things from our homes at different stages in our life and it’s important to keep reassessing what you need, now and in the future, Scott explained.
He advised asking yourself the following questions:
- Would it be easier if all your living space was on one level rather than two?
- Do you need fewer bedrooms but more entertaining space now the kids have flown the nest?
- Do you want a smaller, more manageable garden or more room for your hobbies?
“While it can be hard to let go of the memories a house contains if you’ve been there for a long time, thinking practically about space could really help you focus on what’s right for you and your life, right now,” Scott added.
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Are you prepared to clear the clutter?
It takes no time at all to start accumulating stuff. Family homes, especially those lived in for decades, can become filled with many items as well as memories.
Scott said, the process of downsizing can, for many, provide the motivation to have that much-needed clear out.
“The ongoing popularity and references to ‘Tidying Up with Marie Kondo’ on Netflix proves that lots of us are still looking at ways to streamline the amount of ‘stuff’ that clutters up our homes to lead a calmer, happier life,” he added. “And nothing focuses your mind on stripping back to the essentials than moving into a smaller space.
“Having less space to store clutter means you’ll have to be ruthless, keeping only – as Marie says – things that ‘spark joy’.”
However, he also pointed, for others the thought of tackling the contents of the garage or loft which have been gathering dust for years might be enough to make them stay put.
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Cleaning
Cleaning a house on two floors and with three or more bedrooms can become more challenging in later life.
Scott said: “Keeping on top of the housework can be a challenge at any point in your life, so why do more of it than you have to? A smaller home means less surfaces to dust and less floors to vacuum, leaving you more time to enjoy this new phase in your life.”
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