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In 2017, leading retirement housebuilder, McCarthy & Stone, reported of a downsizing exodus with 5.7 million UK pensioners looking to move to smaller properties – 300,000 more than the previous year.
This growth equated to an expected release of £80,000 of equity on average, equalling £450 billion while it is projected to more than double to £877 billion by 2036.
Values high enough to make any homeowner in their later life dizzy, these findings clearly demonstrate the growing attraction of downsizing to a smaller property.
Nevertheless, the decision to downsize is often not an easy one to make. Emotional attachments, memories and even the sheer amount of stuff which has accumulated over the years are often cited as three major turn-offs.
Is downsizing your property right for you?
Below, we have outlined four reasons why downsizing and ditching the family home could be the right decision for you:
To help fund retirement
Releasing cash is a powerful motivation, but many retired homeowners find that their cash is tied up in a variety of assets which cannot easily be accessed, for example, they own their home but live off a small income such as their pension. Downsizing is an effective way to release funds and supplement a pension during retirement for other expenses such as the opportunity to travel abroad or to purchase the classic car you’ve always wanted. A smaller home doesn’t mean a decrease in lifestyle; in fact it can actually enhance it.
To gift funds for a loved one’s first house deposit (Bank of Grandma and Grandad)
The Bank of Mum and Dad is increasingly relied upon by first-time buyers to boost them up the property ladder. However, grandparents are helping out financial too but find that much of their wealth is tied up in their own property. By downsizing, you can gift a proportion of the sale to a loved one for a house deposit. You may even be able to pay off your own mortgage at the same time.
Read our article ‘What you should know about the Bank of Mum and Dad’ for further information.
Reduce monthly outgoings
A smaller property ultimately means smaller outgoings on things commonly expensive to run. Electric, gas and water in monetary values will be far less in a smaller property then a big family home with plenty of rooms which aren’t being used anymore. Your carbon footprint will be a lot cleaner and the environment will thank you for it too!
To live a simpler life
As well as the many financial perks of downsizing, there is also a range of other benefits to moving to a smaller property. By having fewer rooms to maintain takes the pressure off if you’re struggling with upkeep.
In addition, if you’re adapting to a smaller living space, you are forced to audit your belongings and thoroughly consider what really matters to you and what can be thrown away or donated to charity. There’s nothing quite like a good clear-out to ring in new beginnings.
Read our article ‘Four tips to help you sell your house this summer’ for further information on how to make your property stand out in a crowd.
If you’re thinking about downsizing and would like to talk about mortgage options for you, pop into your local branch or contact us to arrange an appointment with one of our qualified mortgage advisers.
YOUR MORTGAGE IS SECURED ON YOUR HOME. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.