Five Things to Think about before You Downsize
The number of downsizers active in the housing market has skyrocketed in recent months*, and is it any wonder? With steep hikes in energy bills, interest rates and inflation, many people feeling the squeeze are rethinking how – and where – they want to live.
Downsizers are often stereotyped as empty nesters flying the coop to enjoy retirement. But due to economic issues, a wider variety of homeowners are now looking to make a change.
For many of them, downsizing isn’t about starting a new chapter in life but securing financial breathing space by moving to a home (possibly in the same area) that is less expensive to buy and run.
Others looking to downsize may have returned to the office after the Covid working-from-home trend and no longer need as much living space.
Whatever the motivation for making the change, for those thinking about downsizing, here are five factors to consider.
Financial aims – It’s essential to have clear financial goals so you can determine a realistic budget for your next property. Are you looking to reduce your mortgage or become mortgage-free? Or is your aim to free up equity to help a family member? It may be useful to speak to a financial adviser so you can understand all the implications of your move.
Maintenance – If tending to a large garden and handling all the DIY is an unwanted burden, moving to a smaller place might be a welcome move. But bear in mind if you move to an apartment block, you may have to pay service charges and ground rent.
Look ahead – When choosing your next home, consider what your lifestyle is likely to be like five or ten years down the track. Think about issues such as maintenance and accessibility.
Space and storage – Downsizers should prepare themselves for a serious declutter. If you have lots of large pieces of furniture, consider giving some items away to friends or family.
Costs – Before you can enjoy reduced living costs in your new home, you’ll have to pay out on things like stamp duty, legal fees and removal expenses. Make sure you budget for these expenses.
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* Figures show a 53% rise in downsizers active in the market from September 2022 to April 2023, Savills.
