Homeowners aged 55 or over who want to downsize now own an impressive £938billion of UK housing stock, according to the latest count by Legal & General. And there are plenty of reasons they are eyeing up a switch.
Many want to live somewhere a bit more manageable - a home with a smaller garden that doesn’t require much maintenance might free up lots of your time.
Running costs can be a big factor, too, with council tax, water, energy and insurance bills all plunging when you move to a smaller home.
Then there are the bigger financial considerations, such as needing to downsize to release equity in a home to help bring in extra cash during retirement.
Or it might be a purely emotional decision, not wanting a much emptier house to spoil the fond memories of when you all lived there as a family home. This works both ways though, and it can be just as emotionally challenging to leave the comfort of a long-loved home behind.
If you know a downsize is on the cards, then it's far better to front up, deal with it, and get it done. The usual stresses of selling, choosing a new home and buying only get tougher the older you are. And you'll make your life much easier by doing it when you’re in good health and excited about a new stage of life.
Whatever the reasons behind deciding to downsize, here’s what you need to know:
It’s a growing trend
Around 39% of so-called last-time buyers (not my favourite term!) want to move to a smaller home, up from 32% only three years ago, say Legal & General.
Location, location, location
The typical downsizer lives in a four-bedroom house, but wants a two-bedroom property. But a note of caution. A home half the size won’t be half the price in the same neighbourhood, and your expected ‘cash windfall’ might not be as much as you initially think.
Downsizing works best If you are open-minded about regions, as a more affordable location could ultimately allow you a cheaper new home and much improved lifestyle.
Not withstanding the last point, try to find somewhere near friends and family, where there is good local transport.
The idea of a quaint cottage in a chocolate box village may appeal to you, but the reality of being miles from people you know and say, any hospital appointments, you might be smart to reconsider.
Do your sums
Make sure you do your homework on what you can afford and in what area.
When you’re working out the amount of money you are going to release by selling your home and buying a cheaper one, remember that there are costs involved that will eat into your profit. Stamp duty on your next home, moving costs and legal fees.
Realise the challenges and be patient
Downsizing might not happen as quickly as you would like. You might need to wait until you find the right house.
Bungalows and retirement flats may also be in short supply, partly due to competition from all those other people selling-up in later life.
Recent research showed that nearly two out of five older homeowners want to downsize but just under half (49%) have not been able to find a suitable property.
The big clear out
Any type of house move means sorting through belongings. But moving to a smaller property means you will need to part with some – including larger bits of furniture if they don’t fit in the new place. I’m not saying lose the family heirlooms, but you might have to make some ruthless decisions on decluttering.
Get your home market-ready
A clear-out will help you get your existing home ready to go on the market. The less clutter, the larger your property will appear to prospective buyers. You can then think about giving it a lick of paint and making all those repairs that you’ve been putting off.
As well as the mainstream property market, there are companies that specialise in retirement homes that you might want to consider.
Developments also usually offer access to leisure activities as well as differing levels of care and while it's not for everyone, it's worth exploring.
Look out for open days to get a real feel of the place. Many places also offer potential buyers the chance to meet their neighbours.
(Source: Zoopla, 2018)