Is downsizing your property right for you?
We’re all living longer, and downsizing your property can help to make your retirement more comfortable – financially and physically.
If you’re approaching, or already in retirement, it’s worth reviewing your financial situation and property needs to check whether downsizing could be right for you.
Start by considering your physical and emotional needs before looking at the financial pros and cons.
Does your property still “fit” you?
If you’re still living in the large family home in Chichester, but your children have flown the nest, you could be rattling around in a big house that is expensive to heat, run and maintain.
Houses become homes because of the people who live in them, and many people find the family home loses some of its character and warmth without any kids running around and enjoying the space.
It can be hard to let go of the house where you raised your children but, coming back to an empty house every day is a constant reminder of their absence, and can be more painful than downsizing and taking your memories with you.
In a few years, will you still be able to manage the stairs?
Age UK estimates that one fifth of all households include someone with a mobility problem and the vast majority of those affected are over the age of 60.
Developing mobility problems can make the relatively simple activity of going to bed a Herculean task that becomes more and more difficult.
Adapting your current home with a stair lift or moving your bedroom downstairs is one solution – as is finding a bungalow where all your living can be on the same level.
A growing choice for many people is equity release, which allows you to remain in your home by effectively borrowing against the equity in your property, in return for a lump sum or regular income.
Of course, this money will have to be repaid with interest when you die. If staying in your current home is your priority, it is definitely worth investigating the costs and benefits of equity release schemes.
Specialist equity release company Responsible Equity Release (RER), says the average property owner achieved £80,000 from equity release in 2017.
Downsizing to release funds
Of course, the main reason people decide to downsize is to access the equity built up in their property.
Many retired people are asset rich but cash poor.
Selling your house and buying a smaller, less expensive property can free up money locked in your home. You can use the proceeds to fund your retirement, pay off your mortgage to reduce your monthly outgoings or, to help your children and grandchildren buy homes of their own.
According to pension and investment company Prudential, the average downsizer makes around £112,000 by moving to a smaller property.
If you use this money to buy an annuity, you could boost your regular annual income, including your state pension, to around £14,000 per year.
Cut your household bills
Moving from a four-bedroom house to a two-bedroom property could save over £500 each year in energy bills alone.
Reducing or paying off your mortgage will bring your household bills down even further and moving to a smaller property will probably save you money on Council Tax and buildings and contents insurance.
Reduce maintenance costs and effort
Although you may currently love spending every spare hour tending your garden, will you still have the energy and physical stamina to maintain your home in the years ahead.
Smaller properties, and especially newer properties, tend to have smaller gardens and low maintenance plastic doors and windows.
Location, location, location
Many people downsize and move to be nearer to local amenities and health care services.
If you had to stop driving, how easy would it be to attend a Doctor’s appointment or do your grocery shopping?
Relocating closer to a thriving village or town centre could ensure you are always within reach of shops and leisure facilities.
Of course, if you’ve always enjoyed living in a rural location, the hustle and bustle of town centre living could be too much of a culture shock to enjoy.
Don’t forget to consider moving costs
Moving house can be expensive.
You’ll need to pay estate agent fees, stamp duty, solicitor’s fees and removal costs.
There’s no point downsizing unless you will achieve a decent financial return, as well as reduced monthly outgoings.
A good estate agent will help you work out all your likely costs before you start your property search.
A life you can enjoy
You want to enjoy your twilight years and, where you plan to live out your days makes a huge contribution to your overall health and happiness.
Downsizing purely to release equity could leave you missing your old home and moving into a neighbourhood that you don’t particularly like or enjoy.
It’s a big decision and one you should discuss with family and friends before rushing to put your house on the market.
Contact Sims Williams today and let’s get moving
At Sims Williams, we’ve been helping clients to buy and sell their homes since 1981.
As independent estate agents, we have unbeatable local knowledge and a genuine commitment to helping customers to find their perfect property through our offices in Arundel, Walberton and Chichester.
If you’re thinking of downsizing or selling your home, contact your nearest Sims William branch today for a free market valuation.