There are many reasons why moving to a smaller home may be the right solution for you. Perhaps the house is just too big for your needs now that the children have all fled the nest or you’re struggling with rising utility bills and the general upkeep of the house and garden. For retired homeowners who are asset rich but cash poor, downsizing may be a clever way to release some of the capital from the property asset to supplement retirement income.
Whatever your personal situation, no-one moves home without a good reason. But selling your family home with the express purpose of downsizing to a smaller property may have even greater complexity. It’s a decision that may impact other family members and, of course, your own lifestyle. Here or 5 important arguments for and against to help you move forward in the best way.
What are the pros of downsizing?
Fewer chores means more time for yourself
Moving to a smaller property means that it will take you less time to look after your home. Think of all that time you’re saving by having fewer rooms to clean, a smaller (or no) garden to maintain and generally fewer household chores, building maintenance and upkeep to worry about. With any luck, this should give you more quality time to spend with friends and family, and doing things that you love.
Make savings by reducing outgoings
Running a large family home can be expensive. Downsizing to a smaller property should enable you to make savings on regular outgoings such as heating, water and electricity bills, and council tax. Then there’s looking after the building itself. For period properties in particular, the cost of upkeep can be prohibitive. Moving to a smaller, more modern house or flat can make a huge difference to your finances.
The perfect opportunity to declutter
Preparing to move to a smaller property is the perfect opportunity to review all your belongings and reduce clutter. We all have extra ‘stuff’ we keep in the loft or garage, piling up in cupboards and spare rooms. Now is the time to ask yourself: Do I really need it? Will there be space for it in the new home? Getting rid of unwanted and unnecessary items can be a liberating experience that helps you to move on.
The start of a new life chapter
Downsizing is a great way to turn the page to start a new chapter in your life. You may be facing an empty nest or make the decision to retire. You may find yourself in reduced financial circumstances or experience a change in your personal situation. Whatever the background to your decision, moving home to a smaller property will give you the chance to reassess what’s really important to you without looking back.
Release capital from a property asset
With any luck, selling a larger property and moving to a smaller one should give you a net financial gain, even taking into account stamp duty, estate agents’ and legal fees. You then have the option of re-investing a lump sum for long-term capital growth, helping out a family member with their finances, spending it on something you really love, or using the capital to supplement your regular monthly income.
What are the cons of downsizing?
Leaving your beloved home
If you’ve lived in the property for a long time, it’s hard to say goodbye to the place you’ve called home for so long. You may have fond memories of good times, special occasions and your family growing up there. If the emotional wrench of having to leave all this behind is just too great, it may be worth investigating alternative arrangements.
Not enough space for visitors
While downsizing to a smaller home may suit your own needs, what about people coming to visit? You may love the fact that grown up children, grandchildren or friends can pop over anytime and for as long as they like without causing any inconvenience. A smaller property won’t be able to accommodate family and friends in the same way.
Insufficient space for your possessions
By definition, a smaller home means there will be less space for all your furniture and belongings. Decluttering is a great idea but if you’re unwilling or unable to reduce the amount of stuff you own, and you’re not keen on using off-site storage facilities to store your things, downsizing may cause more problems than it solves.
Renting is not a long-term option
Many people choose to sell up and go into rented accommodation as a way to release more equity from the sale of their property. Be warned that while this may work financially in the short term rental prices have increased steadily over the last few years and there’s every indication that this trend will continue. If you’re thinking of living in a rented house or flat as a permanent housing solution, you could find your nest egg being eroded faster than is palatable.
Leaving friends and neighbours behind
Downsizing in order to gain financially often means that you have to move away from the current location. But if you’ve built up a strong social network of friends and neighbours and love where you live, you may not wish to start all over again in a town you’re not familiar with and a place where you don’t know anyone.