When is the right time to downsize your home?

How do you know if you should downsize?

How do you know when it's time to downsize?

Is it a good time to downsize?

What are the reasons not to downsize?

What's the best age to downsize?

Alternative options to downsizing

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.

Work out your finances: The cost of downsizing includes estate agent and conveyancing fees as well as moving, maintenance and improvement costs. Plus, you’ll have to pay Stamp Duty if you’re buying another property. Find a detailed list of costs in our complete guide to conveyancing fees or use our stamp duty calculator to get an estimated cost.

Evaluate housing market trends: Research current housing market conditions to determine if it's a favourable time to sell your home and purchase a new one.

Consider health and mobility: Changes in your or your partner’s health or mobility could negatively impact your everyday lifestyle, so your current or new home should allow you to live comfortably. Anticipate your future requirements by looking for homes with features like single-level layouts, no-step entries, wider doorways, and accessible bathrooms. Plus, keep in mind that you may have to factor in care costs as you grow older.

Space and storage restrictions: There’s a chance that your new home won’t have room for all your furniture and personal items. You might need to sell or give away some of your belongings or pay for storage unit.

Emotional Attachment: Leaving a house filled with memories can be difficult. The nostalgia associated with your current home, from raising children to celebrating holidays, can be a significant deterrent to downsizing.

Moving Expenses: Relocating isn't just about finding a new place; it also involves various costs. From hiring movers to paying for packing supplies and potential renovations, the financial aspect of moving can add up quickly. Often, these moving expenses outweigh the perceived savings of a smaller home.

Potential Market Risks: Though not always considered, the property market's fluctuations can adversely affect your ability to sell your current home at a desirable price. Additionally, the smaller property you intend to move into might appreciate at a slower rate, impacting your long-term financial stability.

Impact on Lifestyle: Downsizing can affect your lifestyle in unexpected ways. Less space might mean fewer opportunities for hobbies that require extra room, such as gardening, woodworking, or home workouts.

Equity release: If you don’t want to downsize you could look at getting a lifetime mortgage or home reversion plan to access equity in your home. Equity release gives you the chance to stay in your current home and convert some of its value to cash. You need to be at least 55 years old to do this and the money is repaid when the house is sold. Find out how long equity release takes.

Rent out a room: If you have a spacious house with multiple rooms, you can always rent out a spare room. The government’s Rent a Room Scheme enables you to earn up to £7,500 per year tax-free from letting out furnished accommodation in your home.

Remortgage: If you have already paid off a considerable amount of your mortgage, you might want to look for another deal that suits your current financial needs, such as remortgaging to release equity that’s tied up in your property. However, as you get older, it can be harder to remortgage to release equity from your home. Some lenders have age limits or stricter rules for older borrowers. It's important to check what's available and talk to a financial advisor before making any decisions.

Consider a retirement interest-only (RIO) mortgage which is very similar to a standard interest-only mortgage and allows you to release equity. The main difference is that you’ll need to prove you can afford the monthly repayments. The outstanding loan is usually paid off when the house is sold, you move into long-term care or when you no longer occupy the property.