Making The Decision To Downsize Your Property
As we proceed through our life we are often striving for ‘bigger and better’ things: whether that is a bigger house, a bigger car, a bigger income, a bigger family… we always seem to have the need or desire to expand on the type or number of possessions we currently have. However, the flip side of this is ‘downsizing’. The most obvious and common ‘downsize’ people make is to downsize their property. There are many reasons why people to choose to downsize their property and this article seeks to examine these reasons as well as considering what group people may be the most likely to take the step to downsize.
One of the most common reasons people downsize their property is financial. If you own, for example, at five bedroomed house in an affluent area of London and wish or need to release some of the equity of your house, you may consider selling your house and buying a smaller 2 or 3 bedroomed property in a cheaper area. This often happens when grown up children have flown the nest and parents feel that they perhaps no longer need as much space and may benefit more from the money they could release if they downsized. If done properly (with advice from a specialist financial adviser), and depending on the size of the mortgage, a downsize such as this could mean that money is released to boost income, top up a pension fund or add to an existing savings account.
The other financial benefits of downsizing your property may include lower council tax, lower maintenance fees, a saving on utility bills and less time needing to be spent on the upkeep of the property.
Other reasons for downsizing include lessening the burden of carrying out the upkeep of a big house, moving to a quieter, more rural area or moving to the coast, or moving to be nearer to family or friends.
However, taking the decision to downsize your property should not be taken lightly and, as with most things in life, there are things that can go wrong and things that should be given careful consideration. For example, you would need to weigh up the cost of actually moving house – this can include solicitors’ fees, removal costs, stamp duty, search fees and conveyancing fees, all of which add up several thousands of pounds. In addition, you need to consider the affect the move will have on your family and lifestyle: will you still have a place for your family and friends to sleep when they come to visit (especially if you are moving away)?; as grandchildren begin to arrive into the world, and if you have moved a considerable distance away to be near the coast, will you be happy not seeing them as regularly as you might have done?; will you be upsetting your beneficiaries by potentially reducing the amount of their inheritance?
Downsizing a property is often a good option for people who are reaching retirement and wish to release some money for whatever reason, however, it is decision that should be made over a period of time and with careful consideration given to the affect it will have on all areas of your life.
