Downsizing in Retirement: Releasing the Golden Egg from Your Empty Nest

retirement downsizing

As homeowners approach retirement, many will be mortgage-free and residing in a property that was purchased a few decades previously as the perfect family home. However, as children fly the nest, many couples will identify with the feeling of ‘rattling around an empty home’. Whether you have considered downsizing as a means to access the equity in your home or simply to achieve a more manageable property, we take a look at the benefits of downsizing as well as the financial rewards.

Downsizing: Doing It For The Right Reasons

Before you make the decision to downsize, it is important to consider all the reasons for doing so and not just the money you could free up.

Downsizing a home can mean losing more than just a property and there are other factors that you should consider about a change in location, including:

  • Lifestyle
  • Social circle
  • Local amenities
  • Neighbours
  • Friends and Family

Before you even put your house on the market, you need to do your research for a suitable alternative. Always take the time to do this thoroughly and look at an area through the eyes of a permanent resident and not as a visitor or tourist. Good attractions may be fun to spend time exploring but will also attract lots of other visitors

Consider all the important aspects of day-to-day living such as access to shops, doctors, pharmacies and libraries. Think about local transport and socialising as well as how far you are from friends and family.

downsizing in retirement

Consider all the essential aspects of your lifestyle before downsizing and be prepared to have to compromise on some aspects. Image via PxHere.

Certainly, it is worth remembering that your new locale will need to meet your changing needs in older age and your considerations may be very different from those of your last property search. For these reasons, it is a good idea to use the services of a specialist property search agent or, at very least, have someone else give you their opinion on your plans.

Looking Forward to the Change

Once you have found a suitable new location and have started looking for a new home, it is only natural to consider what you are leaving behind. If you have lived in the same house and location for a long period then adjusting to a new area can be daunting.

Successful downsizing requires a positive outlook and you should consider this next stage as an adventure.

Downsizing: The Golden Egg

In the 1980s the average house price in the UK was around £40,000 but over the last three decades this has risen to £210,000 representing an increase of 425%. The truth is that investing in property will have realised a significant return over the term of your mortgage with the average detached family home in this area being worth a staggering £630,000.

golden egg downsizing retirement

For some people, downsizing is a means to releasing equity tied up in the home. Image via Pixabay.

Of course, in real terms, this sum will need to go towards purchasing a smaller property so what can your money buy you in the same area?

Area Semi-Detached House (Ave.) Terraced House (Ave.)
Bracknell £379,352 £291,906
Reading £378,414 £299,023
Wokingham £399,809 £312,388

 

And, what about in other parts of the UK? According to the Prudential’s ‘Quality of Retirement Index’, these are the top ten best places to retire in the UK along with indicative house prices:

Area Detached House Semi-Detached Terraced
Dorset £430,275 £280,966 £226,553
Herefordshire £334,940 £216,266 £161,724
West Sussex £548,589 £355,172 £284,902
Devon £376,025 £254,551 £203,940
Isle of Wight £307,497 £212,219 £168,219
East Sussex £446,718 £292,359 £233,000
Rutland £395,748 £244,984 £211,331
Dyfed £224,394 £134,173 £120,085
Norfolk £310,418 £207,160 £172,098
Surrey £798,953 £460,477 £368,885

With the exception of Surrey, your money here in the Wokingham, Bracknell and Reading area would go a long way in any of these areas.

bungalow retirement downsizing

A rural bungalow might seem charming now but consider all those essential thinks like shops, health care and public transport. Image via Geograph.

However, you should factor in all of the costs of moving as doing so can be an expensive business. Downsizing will involve the following:

  • Estate agents selling fees
  • Legal costs for buying and selling
  • Removal costs
  • Stamp duty

The average cost of moving in the UK is £12,000.

Lastly, if you are simply considering downsizing as a way to access money that is tied up in your home then there may be other solutions that do not require you to sell the family home. Discussing your needs with a reputable financial advisor can provide you with several options which you may not have considered.

Don’t forget to read our guide on decluttering before downsizing and selling your furniture at auction.

Based in Wokingham, Property Assistant is a family-run estate agency specialising in managing downsizing for clients looking to start a new adventure in their retirement. We also offer a range of other managed solutions including relocations, property search services and lettings.

To discuss your plans for retirement, contact us today on 0118 912 2370.

Featured image via PxHere.