Over 55s can earn an average of £109,659 if they downsized from a detached three bedroom home to an apartment or bungalow, according to a recent study by Lloyds Bank. If you live in the South East, you could see a potential average “equity windfall” of £273,466 if you choose to downsize – the highest average windfall amount in the UK!
Once the children have flown the nest, your home may feel a little empty (hence the term “empty nester!”) or maybe you’re looking forward to chasing some lifelong travel dreams? There are many reasons for wanting to downsize but, as with any major life change, you’ll need to plan ahead and ensure your making the best decision…
Track how often you use certain rooms
A good litmus test for whether or not you should downsize in the first place is tracking how often you use the space in your home. If you live in a four bedroom house, do you need the other bedrooms for when the grandchildren come to stay? Or maybe you need space for your hobby such as a craft room or a workshop? If you find you’re still making use of much of the space in your home then you may be better off staying in your home.
However, if you’re starting to realise you only use half of the space in your home and you’re finding it tricky to keep up with maintenance (e.g. the housework, general DIY repairs and gardening) then downsizing could be a great option for you.
Ask yourself why you’re looking to downsize
Is it because you don’t need the space? Or perhaps you’re going through a divorce? Maybe it’s because you or you need to move in with family for health reasons. Multi-generational households are on the rise, as parents want to split the cost of childcare and save money on care home fees. Of course, there’s a significant emotional element too – some families prefer to keep their families close by, and living together may be the best option.
What are your downsizing options?
- Buying a smaller house: Moving to a more accessible home such as a single storey apartment or bungalow can help if you or your partner have mobility issues. The outside area, if applicable, will be a lot more manageable so you can enjoy gardening at your own pace.
- Retirement village: Retirement villages are usually gated communities complete with on-site maintenance staff, assisted living features and sometimes even a gym and swimming pools. They’re a fantastic choice for couples and single people, alike. They can also be a lovely way to meet like-minded people and make new friends.
- Granny annex: Between 2014 and 2016, the number of granny annexes in the UK grew by 39%. This is a great choice if you want to retain your independence but live with family members.
- Moving abroad: If you prefer a completely different change of scenery and perhaps a slower pace of life, moving abroad could be an option. You can claim your state pension and private pensions anywhere in the world. However, it’s important to do your research with regards to Britain’s exit from the European Union.
Work out your costs in advance
It’s wise to take into account all the costs involved with moving home. This may include:
- Stamp Duty Land Tax (England)
- Land Transaction Tax (Wales)
- Property surveyors
- Valuation fee
- EPC rating
- Estate agent fees
- Removal company or van hire
- Decorating costs
- Adaptations to your new home (chair lift, walk-in shower and so on)
- Visa (if moving abroad)
Start off by using our conveyancing calculator to work out what you’ll need to pay – whether you’re buying and selling or just selling up:
What are my options if I have second thoughts about downsizing?
Selling up isn’t the only downsizing isn’t the only option if you want to increase your retirement income. There are plenty of alternatives to downsizing such as:
- Equity release / remortgaging (always seek independent financial advice first!)
- Renting out your spare room
- Renting your garage or driveway
- Rent out your entire home while travelling
- Ask friends to move in with you
It’s just a matter of finding out what suits your needs, lifestyle and sentiments. If you need more advice on downsizing, please call our Residential Conveyancing team on 0800 614 722