People choose to downsize their house for a number of reasons. Maybe you’re retiring, your children have left home, the maintenance of your house is too expensive, or you just fancy somewhere a little more cosy.
People choose to downsize their house for a number of reasons. Maybe you’re retiring, your children have left home, the maintenance of your house is too expensive, or you just fancy somewhere a little more cosy. Whatever the reason, downsizing is very common and thousands of homeowners make the decision every week. If you’re considering downsizing your home, we’ve written this guide to help!
In this complete guide to downsizing we’ve covered all bases. We explain what downsizing is, and whether or not it’s a good idea. We’ll run through some of the most common pros and cons of downsizing, and we’ll cover the inheritance tax implications of downsizing.
If you’re looking for something specific, such as the financial implications of downsizing, or downsizing tips, then use our menu below to skip through the article quickly. Otherwise, read on for the complete guide.
Downsizing is exactly what it sounds like! It’s simply buying a smaller or less expensive home than the one that you currently own. Often, downsizing is something that people do in later life, once families have moved out or they are finding it hard to manage a larger house. In fact, downsizing is increasing in popularity. According to recent research conducted by McCarthy and Stone, 48% of pensioners are considering downsizing to a smaller home.
Whatever the reason for downsizing your home, there are often a lot of advantages. Whether or not downsizing is right for you will depend on your personal and financial circumstances.
Whether or not downsizing is a good idea depends on your reasons for it. Some of the scenarios in which downsizing can be a good idea are outlined below.
People approaching retirement age are often asset-rich but cash poor. Downsizing is a great way for new retirees to release cash from their houses and raise funds for their retirement. Furthermore, according to research conducted by the Money Advice Service, downsizing is typically a far more financially sound decision than equity release schemes. By the time people reach retirement age, their children have normally moved out, leaving them with excess space that they don’t need. In these situations, downsizing can be a great idea to free up some cash and get a more manageable space.
Often moving to a new area may mean that house prices are higher, particularly if you’re moving from the countryside into the city. In a situation like this, downsizing is a good idea to make the move more affordable and use the equity that you have in your current property.
If you’re moving abroad, you might want to keep a property in the UK to keep some roots back home. Downsizing can be a good idea in this situation to give you an affordable home and free up cash for you to buy a place abroad.
Having to look after a larger property (such as a Laing Easiform house) is demanding. It can be time consuming to clean and garden unused spaces. Downsizing can help you save time, money and effort by maintaining a home that’s a more suitable size.
Having a property that’s too big for your needs can cost you more than is necessary. Mortgage payments are higher on a larger, more expensive property. Bills, especially with the cost of living crisis, are also more expensive than they need to be. Downsizing is a great idea to reduce unnecessary expenditure.
Look no further - we'll buy your current property for cash!GET AN OFFER
Simply enter your details below to get a no-obligation cash offer for your house.