Downsizing is a great way to save money and live a more convenient lifestyle. It is no longer just for retirees but is becoming increasingly popular with homeowners of all ages.
Making the decision to downsize can be a big one, so consider all your options, as well as the advantages, disadvantages and financial costs.
We’ve outlined the pros and cons of downsizing to a smaller home and some helpful tips to assist you on your downsizing journey.
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Reasons you may want to downsize
There are multiple reasons why people decide to downsize their home. It could be for financial or health reasons or simply a change in personal circumstances.
Here are some of the more common reasons why people opt for downsizing:
- You no longer require a bigger house. When your children have moved out and started their own families, you won’t need a house with multiple empty bedrooms. This means you’ll be paying for rooms that you don’t need and spending both money and time on them.
- Downsizing can be an option if you’re facing financial difficulty. By selling your house and moving to a smaller, more suitable one, you can reduce your monthly expenses and any debt you may have.
- You may have equity that’s tied up in your house, and you’d like to release it. Selling your home and buying a cheaper and smaller one can help you release your equity and add to your savings or retirement fund.
- You may be living in the city and looking for a slower pace of life in the countryside. Selling your home and downsizing to a smaller one in a different location could be the change you need.
- It’s hard to predict what the property market will look like since it’s always changing. It’s important to do your research and pay attention to the peaks and troughs in prices and stability.
- It’s known that summer and winter are bad times to sell property since people are usually away on holidays in the summer or busy with Christmas in the winter. Spring and autumn are usually quieter months, so they might be the best time to move.
Keep the heat inside
Nothing is more inviting than a toasty, comfy home during the winter. You’re likely to have your central heating turned on for a lot during the cold season, so make the most of the heat you’re paying for and get the greatest value for your money.
- What temperature should you keep your house at during winter? The government recommends 18 degrees Celsius since it can get a bit too chilly, but if you feel the cold more easily, then there’s no harm in turning up the thermostat a few notches.
- Invest in a smart thermostat to help you maintain your home at the ideal temperature without having to do lots of manual programming. It’ll turn down the temperature when you’re not home, saving you money, and when you return, it’ll detect this and turn up the heat.
- Insulate your pipes and hot water tank to ensure your water stays warm and maintains its temperature. A tank jacket for your hot water tank could save up to £35 a year, and for external pipes, you can get foam tubing or ‘lagging’ that wraps around them to protect them from extreme temperatures and keep the water hot.
- Make your radiators more efficient by making sure they’re in good condition and getting the most out of their location. Have them bled regularly, and make sure no furniture is blocking them. If your radiators are on exterior walls, line them with foil to reflect heat back into the room instead of it dissipating into the wall.
Advantages to downsizing
Downsizing your home has many advantages. Here are some of them:
- Reducing Financial Strain – One of the most common reasons for downsizing is to reduce financial pressure. Selling your current home and buying a cheaper one can leave you with money to pay off any debts or bills you may have.
- Easier Maintenance – Living in a home that is too big for you can be costly and inconvenient to maintain. Paying for repairs and decorations for unused bedrooms can be expensive and time-consuming. Downsizing can be a good option for older homeowners, as it can be difficult to keep up with maintenance as you age.
- Reduce Monthly Outgoings – You may be paying a lot of money each month on bills such as council tax, gas, electricity and water. Moving to a smaller home could drastically reduce your monthly outgoings.
- Reducing Health Worries -If you have health issues, living in a large home can be difficult due to stairs and other issues. Moving to a smaller, more compact home could help reduce these worries. If you don’t want to navigate stairs, you may want to consider a bungalow; if you want close companionship with freedom, a retirement village or sheltered accommodation may be a good choice.
Disadvantages to downsizing
When it comes to downsizing, there are cons that may influence your decision whether to move or not. Let’s look at some of the potential drawbacks of downsizing:
- Space restrictions can be a considerable issue with downsizing. You may feel like you’re tripping over people’s toes in a smaller home, so it’s important to consider how much space you need for your belongings. You can still make compromises, such as opting for fewer bedrooms and a smaller kitchen but bigger living and dining areas.
- It can be a big change, both financially and emotionally, to move to a smaller home. If you’re used to living in a larger home, downsizing can be a big lifestyle change.
- Having family and friends stay over could be something of the past if you choose to move to a much smaller home with fewer bedrooms. If you have grandchildren visiting regularly, this could be a factor to take into consideration.
- Downsizing can come with a lot of expenses, such as solicitor and estate agent fees, as well as moving costs. You may not be left with much money afterwards, especially if you have any debts to pay off.
Is downsizing expensive?
Downsizing a house comes with costs that can take out of your equity, savings, or inheritance that you may want to leave to your family. It’s hard to tell exactly how much it will cost since all homes are valued differently.
However, you should be prepared for expenses such as estate agent fees, solicitor fees, conveyancing fees, and survey fees, which can range from hundreds to thousands of pounds. On average, estate agency fees are around 1.8% plus VAT of the house’s value.
Stamp Duty
If you’re downsizing, you’ll usually have to pay stamp duty on your new property, which is applicable to any houses valued over £125,000. The current rate of stamp duty is 2% of the property value. As an example, if you buy a property worth £130,000, you’ll have to pay £2,600 in stamp duty.
Moving and packing fees are also something to consider. You may have to pay for a moving service, any necessary storage, and packing materials.
Your checklist
- Is downsizing the right decision for you? You can install a lift and make your home wheelchair friendly.
- Preparing to downsize can be an overwhelming experience, and there are many things to think about. To make the process easier, we have created a handy checklist of things to remember.
- Create a to-do list – Organising is essential when downsizing, so make a list of the pros and cons, as well as calculate any expected costs or quotes.
- Declutter – Begin decluttering your home and getting rid of anything you no longer need. Downsizing will limit the amount of space you have for clutter, so consider selling items to raise extra money for the move or donating them to charity.
- Fresh paint – If your existing home needs a refresh, consider painting it to make it more appealing to viewers. The quicker your home sells, the sooner you can move to your new home and start your new chapter.
- Shop around – Make sure you explore your options and find the perfect home for you. You may find your dream home on the first viewing, but it’s important to check out other properties as well.
If you’re thinking of downsizing your home to a smaller one and would like to sell your house quickly, then please get in touch with our experienced team at Property Saviour. We’ll provide you with a free cash offer.
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