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Should I downsize to a smaller home?

Downsizing to a house smaller than your current home might seem strange after climbing the property ladder. Learn more about the pros and cons and how downsizing can make you better off.​

 

Benefits of downsizing​

Why build up to owning a decent sized home with ample space, only to then take a few steps backwards?​

​If your needs and priorities change, a smaller home may suit your new lifestyle. In some cases, it can also free up cash and save you money.​

There are many advantages to switching to a smaller house, yet it really depends on what stage of life you’re at and what you want from your home.

The pros and cons of downsizing

Pros

  • Empty nesting. If your children have all grown up and moved out, you might have unused rooms. This can make your home feel big and empty.
  • Cheaper bills. A smaller home could mean cheaper utility bills and paying less for buildings insurance.​
  • Moving closer to family. You might simply want to move house to be near your children, grandchildren or other family.
  • Practical purposes. Switching from a house to a bungalow or flat mean less housework, general maintenance and time spent doing DIY.

Cons

  • Emotional attachment. Moving house can mean leaving behind a home where you made many happy memories.​
  • Space and storage. You will need to get rid of belongings if your new property doesn't have space. You'll also have less space to entertain.​
  • Moving costs. You'll need to cover the costs of buying a new home. This can include estate agent charges, stamp duty, surveys, conveyancers and more.​
  • Availability. There may not be suitable smaller properties in the area you want to live.

Can downsizing make you better off?

If you own your property outright and have completely paid off the mortgage, you may be able to free up money through downsizing.​

How you could benefit​

One of the main reasons many people consider downsizing is to free up some money so you can comfortably enjoy your retirement.

Say you live in a three-bedroom detached house in the city and your children have left home – you no longer need all the bedrooms. Selling this property and moving to a two-bed bungalow closer to family could free up equity.

You'll need to pay for general moving costs, stamp duty and conveyancer fees, but the rest will be your money to use as you please.

Here's an example ...

If you sell your home for £200,000 and buy a bungalow for £125,000.

This frees up £75,000 – assuming you've completely paid off your mortgage.

House prices vary, so impartial financial advice may help if you're thinking about selling

Further savings from downsizing

There are other ways downsizing could help you save money. Here are just a few of them.​

Cheaper utility bills

Gas and electricity bills should be lower, as it costs less to heat and light a smaller home.

Reduced maintenance

A smaller home needs less work. And if you have a smaller or no garden it may free up more time and money as well.​

Lower consumption

With less storage space, there's less chance of you buying clothes, equipment and other goods to fill it.

Let’s take a closer look

  • There are many possibilities when downsizing. These are some of the main options for downsizing:

    • Buying a smaller home. Simply moving to a smaller property, even in the same area, to free up equity or because you don’t need as much space.
    • Renting a new home. Selling up and renting once you’ve paid off your mortgage could free up a lot of money, depending on how much of your mortgage is paid off.
    • Switching to a flat. Downsizing from a house to a flat can save on heating bills and maintenance costs.
    • Being closer to family. If you’re thinking about moving nearer family, this can be a common time to downsize. You’ll need less room for family to stay over anyway if you live around the corner.
    • Moving into a bungalow. A bungalow can be easier to manage and get around with everything on one floor.
    • Heading to a new area. Moving to a new area is a common time to downsize, especially if property prices where you live now are higher.

  • Preparing to move home always needs some level of decluttering. When you’re getting ready to downsize it’s even more important, as you may not physically have enough room in your new home for everything in your current one.​

    There are a few things you can try to make decluttering a success:

    • Measure your new home. Work out how much floor space you’ll have in your new home. Measure door frames and floor-to-ceiling to work out if anything’s too bulky or tall to move in.
    • Start decluttering as soon as possible. It can be a long task so tackling it once you know you’re moving is best.
    • Sort one room at a time. Begin with the biggest or most cluttered room and work your way down. This makes the task seem less daunting and makes sure every square inch is covered.
    • Follow the one-year rule. Be brutal when deciding what to keep and throw out. Have you used each item in the last year? If not, you’re unlikely to use it in the next 12 months, so it may be best to get rid of it.
    • Pass on items. Donate any unwanted belongings to charity shops, family or friends to reduce waste.

Home mover calculator​

If you are thinking about downsizing to a more affordable home, the home mover calculator could help you view your mortgage options. ​

See what your monthly repayments might look like.

Mortgage calculator​

You could lose your home if you don’t keep up your mortgage repayments

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