The surge in downsizers actively engaging in the housing market has been remarkable in recent months, and it’s not difficult to understand why.
With significant increases in energy bills, interest rates, and inflation, many individuals who are feeling the financial pressure are now reconsidering their living arrangements and preferences.
Traditionally, downsizers were often perceived as empty nesters seeking to enjoy their retirement by flying the coop. However, due to prevailing economic challenges, a more diverse range of homeowners is now seeking to make a change.
For many, downsizing is not just about embarking on a new chapter in life; it is also a strategic move to attain financial breathing space by relocating to a more affordable home, possibly in the same area.
Another segment of downsizers comprises those who have returned to physical offices after the Covid work-from-home trend and no longer require as much living space.
Regardless of the motivation behind the decision to downsize, there are five critical factors that prospective downsizers should consider:
- Financial Objectives – Having well-defined financial goals is crucial for establishing a realistic budget for the next property. Whether it’s reducing the mortgage burden, becoming mortgage-free, or freeing up equity to assist a family member, consulting a financial adviser can help understand all the implications of the move.
- Maintenance – For those seeking to escape the responsibilities of tending to a large garden and handling extensive DIY tasks, transitioning to a smaller dwelling can be a welcomed change. However, it’s essential to be aware that moving to an apartment block might entail additional costs such as service charges and ground rent.
- Future Planning – When selecting the next home, it’s prudent to consider one’s lifestyle projection over the next five or ten years. Factors like maintenance requirements and accessibility should be carefully thought through.
- Space and Storage – Downsizers should prepare themselves for a thorough decluttering process. If there are numerous large pieces of furniture, it might be beneficial to consider gifting some items to friends or family.
- Costs – Before enjoying the reduced living expenses in the new home, certain upfront costs like stamp duty, legal fees, and removal expenses need to be accounted for. Proper budgeting for these expenses is essential.
In conclusion, the decision to downsize warrants careful consideration of financial implications, lifestyle preferences, and future needs. Seeking advice from professionals, such as financial advisers, can facilitate a smoother transition into a more suitable and manageable living arrangement.
* Figures show a 53% rise in downsizers active in the market from September 2022 to April 2023, Savills.