By Kavi Chauhan, Deputy Head of Conveyancing & Licensed Conveyancer.
Leaving your much-loved family home isn’t always an easy decision, especially if you’re not ready for a change. However, it sometimes makes financial sense and can be a good opportunity to start afresh. Plus, you might feel relieved once you’re freed from the responsibility and costs of maintaining a larger property.
Let’s explore whether moving to a smaller home is a good idea for your circumstances, as well as when it’s the right time to downsize.
How do you know if you should downsize?
Here are some signs it’s time to sell your house and make a fresh start:
- Maintaining your home has become overwhelming. Larger homes require more time, effort and money to maintain, repair or renovate. As you get older, maintaining your home, doing the cleaning and gardening might be physically challenging. Selling your property while it’s still in good condition to avoid major repairs and save money might be a good idea.
- Your current area doesn’t fit your lifestyle. Your needs and priorities might change as you enter different life phases. If your career and/or family don’t tie you to your current location, moving to another area that offers amenities, transportation or the chance for more social interaction could significantly improve your quality of life.
- Financing your property is challenging. If your kids have left home, you might find yourself in a large house with multiple unused spaces. However, you’ll still need to take care of spare rooms, as well as pay costly utility bills, insurance, and taxes. It’s also more likely to have a mortgage with higher monthly repayments. Downsizing to a smaller home could help you keep your expenses down or even give you the chance to go mortgage-free.
- You’re looking to release home equity. You might also be looking to release equity to live comfortably when you retire, travel the world or help your children get on the property ladder.
How do you know when it’s time to downsize?
Downsizing is a personal decision that depends on your circumstances and needs.Ensure it makes sense financially, taking into consideration all the costs associated with a house sale. You’ll also need to think about the property market. For example, it might make sense to move when there’s a high demand for houses similar to yours. This will enable you to release maximum equity from your house to fund your retirement or any other projects. Before downsizing it’s worth doing your research to properly assess the value of your current home. Estate agents can provide you with accurate and in-depth appraisals, while you can also aways work towards maximising your home’s value.
Is it a good time to downsize?
Downsizing is also an emotional decision, especially if you’ve lived in your house for decades and you’re emotionally attached to it. Apart from the financial aspects you’ll also need to consider the emotional cost of your decision – since this transition can be difficult.
Also, the process of selling your home, arranging viewings to find your new place and moving in can be complex and time-consuming. If you’re not ready to manage it all because you’re dealing with multiple things in your life, you can always postpone it until you’re fully prepared.
What’s the best age to downsize?
There’s no right age to downsize your home. However, people tend to make this decision later in life, as their kids fly the nest and they’re moving towards retirement. This is why planning for retirement as early as possible will enable you to explore new possibilities ahead.
Moving at the right time will allow you to make the most out of your new property and look forward to the next stage of your life. You can focus on enjoying your retirement, instead of worrying about property maintenance for a place that no longer suits your needs.
However, downsizing isn’t just for retired people. It might make financial sense for anyone who’s looking to reduce costs, free up funds and live their desired lifestyle. It could also be a good way to reduce your mortgage payments or pay off any debts.
Get a conveyancing quote for your downsize using our online calculator.