Downsizing often has a lot of negative connotations and many homeowners are often very resistant to the idea that they should do so. Sometimes a decision like this is forced on us for financial reasons or by necessity as our physical and mental health begins to diminish in old age.So, does it make sense to downsize?
However, downsizing offers lots of positives and, when done earlier rather than later, can offer up a whole new perspective on how we lead our lives. Freeing up cash, giving us more time and saving money on a monthly basis, a smaller property could be the start of a new adventure.
In this feature, we take a closer look at the reasons why downsizing is important to consider early enough to enjoy the benefits as well as some of the concerns people have about selling up.
What Are The Benefits? Does it Make Sense to Downsize?
There are four key reasons to consider a downsizing, all of which produce positive outcomes.
Having paid a mortgage over many years, most people have a sizable amount of equity built up in their homes, even if this has not been fully repaid.
Research by the retirement planning and financial services company Prudential suggests that the average downsizer in the UK could release around £112,000 in equity by selling their home and moving to a smaller one. This cash could be used for all manner of things from helping children and grandchildren to finance their own property purchases to supplementing a state pension.
Some companies will offer an equity release scheme by purchasing part of your home with a lump sum cash payment in order that you can remain living there. The downside of this is that you no longer own your own home and a repayment to the equity release company must be made, usually when you die. Downsizing, on the other hand, means that you continue to own your property and there is no uncertainty about the future of your largest asset.
In addition, downsizing will allow you to realise the full market potential of your home whilst equity release companies often undervalue a home.
When asking yourself the question, does it make sense to downsize, the initial cash injection can be a big influencing driver but there is more of a financial benefit. Whilst a smaller home will naturally cost less to buy, they are also a lot cheaper to maintain and to run. You can make savings on everything from council tax and energy bills to maintenance and insurance. Of course, if you are still paying a mortgage and intend to move this with you then your mortgage payments will also be a lot lower.
Looking at a typical 5-bed detached vs a 3-bed semi-detached vs a 2-bed retirement home in Wokingham, the following monthly savings could be made:
|Running Costs||5 Bed Detached||3 Bed Semi-Detached||2-Bed Over 60s Flat|
With potential annual savings of £1800+, there is much to be gained financially from making a choice to downsize your home. Of course, the costs of running a property vary and some retirement homes may have additional monthly fees so always do your research.
When you purchased your existing home, the reasons for choosing it will no doubt have changed. Perhaps you originally chose the property for its proximity to local schools or because it was rural and isolated. As you reach, or move into, retirement age and no longer have the same needs, it pays to think about things like transport links, local facilities like shops, doctors surgeries and leisure centres.
When you make a decision to downsize in later life, you can consider what it is that you want from your community.
Easier to Manage
Family homes often come with larger gardens, more rooms and lots of space. One of the obvious benefits of downsizing is in reducing the amount of general maintenance and cleaning. Whilst these things may be manageable now, the point is to look ahead and consider whether you could cope doing this in the future.
Of course, being easier to manage, a smaller property will also give you more time to enjoy the things in life you want to do.
Are There Any Disadvantages to Downsizing?
Of course, there are some things to consider about downsizing that might not bring such benefits and, whilst most of these are easy to deal with, some will require adjustment.
The decision to downsize from a family home can be quite an emotional one and there are many people who feel quite sentimental about leaving behind the memories.
Feeling like this is very natural and there is no quick or easy way to come to terms with, what can be, a poignant wrench. Rest assured that it’s because you feel like this that means the memories will not go away and they are not ‘stored’ in the bricks and mortar of your home.
You may need some time to adjust to the idea but when you do you can make the move a little easier by:
- Taking plenty of pictures of your old home and, perhaps, making an album.
- Leave one last memory behind; maybe burying a memory box or placing some photos hidden in the attic. This ‘secret’ you share with your old home is one way of knowing a part of you will always remain there.
- Take a piece of home with you by digging up a favourite plant, storing the house name plate or something else that won’t be missed.
- Have a house-leaving party to say goodbye.
Less Space for Guests
A treasured part of remaining in the family home is that you always have enough space for visitors and downsizing can mean giving up hosting big events like Christmas or summer parties. Again, this can take some getting used to but perhaps now is the time to relinquish these duties to other members of the families. Instead of focusing on the downside of this, try to remember how much stress and hassle you will be saving yourself.
Also, a smaller home doesn’t mean to say that you can’t still be the host but you may just need to adjust your expectations and make some alternative arrangements. If having room for guests to stay over is very important then consider a new property close to a local hotel or look to invest in a decent sofa bed.
Less Space for You
Along with guests, some people worry that downsizing will mean less space in general and this can be exacerbated if you are sharing the home with a partner and one, or both, of you has a hobby which needs some extra space.
Whilst downsizing can mean fewer and/or smaller rooms, there is no reason why you cannot find a property that has suitable space to give you a ‘sanctuary’ or hobby room.
One of the benefits of downsizing early in life is that you have the physical and mental capacity to make some adaptations and to ‘customise’ your new home to suit your lifestyle. Consider a property with spaces that can be readily converted or with gardens that could accommodate a nice garden hobby room. Our recent feature on Man Caves and She Sheds has some great examples of small spaces that can be transformed and, don’t forget, with the money you save and release from downsizing, you could invest in a very reasonable outbuilding.
Getting Rid of Belongings
There is no doubt that downsizing to a smaller home will mean losing some of the possessions you have accumulated. Fewer rooms means less furniture and often storage restrictions will mean that you will need to seriously pare down your personal effects.
Decluttering can be extremely therapeutic for some but for others who form emotional attachments it can be quite stressful.
The decision to downsize comes in stages and part of that journey is getting your house ready for sale. At this point, it is important to declutter and stage your home effectively in order to attract more viewings. You will find that decluttering and ridding your home of excess belongings is easier when attacked in smaller chunks.
Nobody is suggesting that you simply throw things away and you may find that some items are gifted to family, sent to charity or even sold at auction.
But, I’m Not Old Enough to Downsize!
One of the main objections to downsizing as we age is the belief that doing so means we are ‘old’ and that downsizing is a precursor to moving into sheltered accommodation.
The fact is that downsizing early enough is not a shortcut to a care home but a part of sensible planning for retirement that could even prolong independence.
A study, undertaken by Retirementmove, in 2015 reported that 64 is the ‘perfect’ age to downsize. Not only were people judged to be mentally agile enough to manage the process of buying and selling a property but it is also the age when the most rewards from a downsize can be reaped.
70% of people polled in the study believed that it was important to move when they felt young enough to make the most of a new home and to not leave downsizing too late and make doing so a burden for their children.
Downsizing too late in life can be a much more problematic process, not only physically but emotionally and cognitively. So, perhaps the real question is does it make sense to downsize sooner or later?
People who choose to stay in their homes, long after the size of managing it has become a struggle, find that unused rooms, large gardens and extra space is difficult to cope with.
Property Assistant & Downsizing
Property Assistant is a family-run estate agency based in Wokingham that specialises in providing a fully managed downsizing service. From the moment you make contact with us, we will take responsibility of marketing your home and finding you the best buyer for the best price. Not only that but we can help with your property search to find you your next home, whether this is retirement living or the perfect property for your next adventure.
So, does it make sense to downsize? We can help you reach that decision.
To find out more about what makes us different and why Property Assistant is the perfect choice for your downsizing needs, call us today on 0118 912 2370.