Downsizing can be a great option for those wanting to free up some capital and moving to a smaller property that is easier to manage. Here we look at the pros and cons to help you decide whether it’s right for you.
What is downsizing?
Downsizing is when you move to a smaller house than the one you currently live in. This is a decision often made by those whose children have left home or are concerned about the upkeep of a large home.
There are plenty of other reasons to downsize your home. Maybe you have health or mobility issues that would benefit from a different style of property. Perhaps you’d like a cheaper home to free up some of your capital to spend in your retirement or help a child onto the housing ladder. For some people it’s just about scaling down their life with a smaller home and fewer possessions.
What are the advantages of downsizing?
- Release equity – If you have owned your current property for many years it is likely that it has significantly increased in value and you may have either no mortgage or a very small one. This means that if you buy a smaller, and cheaper, property you may release a lot of equity to spend as you wish.
- Reduce maintenance – Downsizing to a smaller property also means less maintenance and the property will be better suited to your needs as you get older.
- Reduce your bills – Generally smaller properties are also cheaper to run so you can expect your energy bills and council tax to be lower.
- Move to a more suitable location – You can choose a property in a more favourable location, perhaps nearer to family or friends or somewhere in closer proximity to local amenities if getting around is becoming more difficult.
And what are the disadvantages?
- Is yours really is an empty nest? – While your children may have left home, think about whether they’ve done so for good. Research shows that high house prices and rental costs mean record numbers of adult children aged 20-34 are choosing to live with their parents. Is there a chance your children might seek to return to the family home – and if they did, would you have the space?
- You don’t want to leave your home – Remember too that leaving the house you have been living in for many years is going to be an emotional experience – for you and family members. Make sure you are all ready for this by talking openly about your decision.
- Difficult to find something that really appeals – You may find that after years of living in a large house, a smaller property feels claustrophobic and poky.
- Lack of downsizing options in your budget – Smaller homes are not always cheap, low stocks of smaller properties with gardens, amenities within walking distance and good transport links can push prices up.
Costs to consider
Stamp duty often puts people off downsizing, especially in more expensive areas like Wimbledon. Make sure you do your research and choose a property that will still be suitable as you get older, you really want to avoid needing to move again in a few years’ time.
You will also need to factor in estate agent fees for the property you are selling, conveyancing costs, home buyers surveys and removals costs.
When should I downsize my home?
You can downsize at any point, but you will need to be ready to embrace your inner Marie Kondo and really pare down your possessions ready for the move. If this feels impossible, downsizing may not be right for you just yet.
If you haven’t decluttered much recently, you’ll need to sort through years of personal possessions and be quite ruthless. A good proportion of your furniture will probably have to go too. You should allow yourself a few weeks to do this – don’t leave it until the last minute.
It makes sense to consider downsizing your home before you get too old, as the stress and hassle of negotiating and completing a house move should be easier to deal with when you are still relatively fit and healthy.
Find the right place
Think about location and the type of property
Sit down and carefully work out what you are looking for in your new home. Do you want a rural retreat or to be close to all the amenities of a large town or city? Do you want to move closer to family or friends? What would happen if they decided to move on?
Don’t just think about the here and now but the future – if you think this will be your long-term home. Will transport links be good enough to get your around and will it have the facilities you need. Make sure you do plenty of research and spend as much time as you can in your desired location.
Think about the type of home you want to move to. Will a two-bedroom apartment suit your future lifestyle, or are you just looking for a smaller house than you have now? Does your preferred area have enough of this type of housing?
Is a retirement property right for you?
Retirement complexes, aimed at the over-55s, may be a good option if you’re thinking to the future and don’t have family close by. Some schemes offer ‘assisted living’ or ‘extra care’ accommodation with additional services such as on-site cafes, cleaners and optional carers. These can be a good alternative to residential care if you have health needs.
However, think carefully and do your research before opting for a retirement place. Flats can be very small and service charges high, plus not everyone adapts well to this type of living.
Buying a bungalow
Bungalows are a popular option for downsizers but the demand far outweighs supply so this isn’t always a viable option.
Should you sell before buying?
This is a difficult one. The general consensus is to sell first. Otherwise, if you find your dream home, you may be put under pressure to drop your selling price to make sure you do not lose it. However, market conditions may dictate what you do, so it would be a good idea to get professional advice.
If you have the cash, you could buy first then put your property on the market. If you do this you will need to pay the stamp duty second homes surcharge – an additional 3%, however, you can claim this back if your first home sells within three years.
A downsizing checklist – how to downsize for retirement
In summary, here are a few things to think about before you decide to downsize:
- Consider whether you need to downsize and what your reasons for doing so. Decide whether it is really something you want to do.
- Research the types of properties available and decide whether they would work for you.
- Think about where you would like to live and whether you can afford the type of property your are after in that location.
- Have a big clear out and throw away (or donate) anything you don’t really need.
- Get your current property ready to sell.
What about Wimbledon?
If you want access to more green space, while being in easy reach of the facilities in a town, Wimbledon might be the place. With homes of all sizes, plus a choice of apartments in stunning new developments, there are many options for downsizers.
Call us now for advice and help finding your perfect property.