When you think of downsizing – you probably imagine older homeowners who are selling the family home to move to a smaller, more manageable property to release equity.
But new research has revealed the younger generations are just as likely to downsize as those aged 55 and over.
In fact, according to a survey by Opinium commissioned by Hargreaves Lansdown, over one in 10 people aged 18 to 35 are planning to downsize because they cannot afford a bigger property than the one in which they already live.
This is, in part, down to the fact people in this age group are more likely to move than others. However, it’s also because those aged 18 to 24 are more likely to downsize than upsize.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown, explained: “In some cases, this will include those gaining their independence, who can’t afford anything like as much space as their parents.
“It’s also why people in this age group are overwhelmingly more likely to be planning to move area, to somewhere they’d like to live rather than somewhere they had no choice over.”
She added: “12% of those aged 24 to 35 are planning to downsize too. This will include some who move out of the family home later, but also young renters who are being forced to downsize by rising rents – especially if they’re simultaneously trying to save for a home themselves.
“It will also include those who eventually buy and may have to downsize again to get onto the property ladder.”
Moving to a different areas
The research also uncovered many people were moving to completely different areas now – the in the most part to find somewhere more affordable and avoid paying more rent.
Others were downsizing to a more desirable area and some were moving further afield to find more space thanks to the flexibility afforded them by hybrid working.
Sarah added: “This survey was carried out in April, when rises in the cost of living had just started to bite, so there’s little sign of price rises moving the dial significantly at this stage.
“However, as time goes on, more landlords hike rents, and prices keep rising, this will have a more far-reaching impact. We expect more people to consider downsizing across the board or moving somewhere more affordable as we go through the year.”
Race for space is slowing down
The study also indicated the so-called race for space, identified last year when homebuyers were seeking properties in more rural areas due to the rise in homeworking, had started to wane.
Indeed, people were less likely to be considering upsizing than at any time since the onset of the pandemic.
Sarah added: “The only group with significant numbers still taking part in the race for space are higher earners, with more than a quarter planning to trade up in the coming year – compared to one in 20 basic-rate taxpayers.
“They’re also twice as likely to be considering moving areas, which owes much to the rise of hybrid working among this group, which leaves more of them considering a move further from work, where they’ll have even more room to roam.”
