We think you'll agree it’s hard enough when you’re simply moving home, but downsizing often has an extra emotional weight attached.
And it's not just that ...
Choosing to move to a smaller, more economically viable property is something that occurs mostly because there's been a significant change in your circumstances.
Whatever your circumstances we've written a guide that will help you through the downsizing process.
The current picture on downsizing
- The biggest market for downsizing is older people. Many of them feel that downsizing can fund retirement as well as manage other outgoings as they age and cannot work
- Downsizing can work very well. An average equity release of £98,000 to the homeowner
- Over 50% of property in the UK is ‘under occupied’. Source: Nationwide. This is literally where the property does not have enough people in it to make financially necessary
Why people want to downsize
Perhaps the most common reason for downsizing concerns age.
Often, the fact that children have grown up and left home is enough for some people to seek a smaller, inexpensive property. There's no need to have a family home when most of the family are living elsewhere.
Another reason could be, again, linked to age.
Some parents find that downsizing makes sense because their children have moved onto higher education and the fees need paying. Downsizing frees up some money and takes some of the financial pressure off the parents.
In addition, many homeowners have to sell their home to pay the large cost involved in moving into a care home.
"The real point here is that we have a scandal at the moment where, every year, 30-40,000 people are having to sell their houses to pay for care costs."
Jeremy Hunt (then Secretary of State for Health), BBC News 2013
The financial situation can also be a spur to downsizing. With an economy that has suffered in recent years, it’s no surprise that a large section of the population are choosing to move somewhere less expensive.
A recent report by Hamptons International showed the distribution among age ranges for downsizing:
|Age||Percentage moving home|
Data courtesy of Hamptons International
The details above show that the age range least likely to downsize are those in their 30s, while those most likely to downsize are people, in their 70s.
Take a read:
- Why a Retirement Village May Be the Best Choice For You
- Choosing The Correct Retirement Village
- Find out the Real Costs of a Retirement Village
Benefits of downsizing
There are lots of benefits, and once we’ve gone through some of them, you'll see why downsizing is attractive for so many people.
Less to worry about
We’re not talking about general stress.
However, if there are constant jobs to do in the home it can prove to be particularly stressful. A larger home is much harder to maintain than a small one. All that extra living space requires a huge effort, often every day. Taking that down to a smaller house is a clear benefit.
It costs less
It’s important to remember that the costs of running a home will be significantly reduced if you move into a smaller property. Energy costs, for example, will be cut, as will costs for water, for example. You will have a smaller property that doesn’t require as much work.
A new start
Downsizing to a smaller property can mean a brand new start. You may have had a major life event such as a bereavement, and moving into a smaller property, often far away from your current home, can allow you to reflect, and think about the future. New surroundings make a big difference.
A bit of advice for downsizing
Whether you’ve been forced to downsize due to market conditions, or you simply made a choice to do so, it does require significant levels of preparation to ensure that things go well.
Here's the deal:
One of the very first things you need to do is to audit your stuff. Before you even start to move into a smaller place, you need to take stock. Make a list of everything in your current home. And that’s everything. Once you’ve done this, take a while to go through that list. It’s an interesting one.
Obviously, this won’t be easy, especially if you have an emotional connection to a place and the memories in it. So before you burn everything, turn that big list into three smaller lists.
- ‘Can’t do without’
- ‘Can leave behind’
- ‘Can be replaced’
Then grab a pack of sticky notes and run around labelling each item.
Why does this matter?
This activity will help you downsize your belongings. Before you know it, you’ll have less in the way of possessions and worries, and you should be able to focus more on making the move.
Next, look into the various storage options that are available to you. Having a smaller place to move into means less extra space, but the strain can usually be alleviated by sensible storage options. As a starting point, look for under-the-bed storage and storage you can hang on walls.
Downsizing to get out of debt
This is one of the reasons why downsizing is so popular. Yet it's a relatively new phenomenon.
It’s important to know if it’s the right thing to do.
So, what's the real story?
Many people have downsized to pay off debt, only to find that their money pretty much stays the same. And that’s because the mortgage wasn’t the problem.
The problem was money management.
Put it this way. If your mortgage is less than 30% of your monthly income, you should be able to manage this. If you can’t then there are problems elsewhere in your income. You need to address these because a mortgage of that size shouldn’t be a financial burden.
If it is more than 40% of your monthly income, then you may well be sitting on a property that is pushing you into financial difficulties.
This is a key distinction ...
Too many people sit on a large, crippling mortgage and then they fall into a trap. They can’t move and they can’t really afford to stay. Thinking about that 40% rule, if your mortgage is causing that much trouble, it’s best to get out.
Is downsizing to get out of debt a good idea?
Yes, as long as losing the mortgage will free you up to move somewhere more financially viable. And as long as you manage your money well after you have moved.
Take a read:
Best places to downsize in the UK
There are some parts of the country that are better suited to people who are downsizing. This may be because they have more apartments (apartments make perfect destinations for downsizing) or the pace of life may be a little slower.
Whatever the reason, we’ve found a few hotspots for downsizing around the UK.
Hart has seen a massive increase in people moving there to downsize in the last few years. This is partly because the town has seen an increase in the number of retirement homes available and is seen by some as the most desirable place to live in the UK.
Other places that have seen renewed interest in downsizing residents include Daventry and Lichfield, again these are places that appeal to older people, and people who want a quieter life with less to worry about.
Downsizing is becoming more popular, and if anything, it's saving people money (or paying off debts). Just remember to look at your current circumstances to see whether or not downsizing is absolutely necessary.