Downsizing isn’t just for retiring or the elderly. It could be the answer to raising capital or to free capital to provide a deposit for a child’s first home.
Is it time to consider downsizing?
Let's take look at what needs to be considered.
Well quite simply selling your current home, often of many years, and moving into a smaller property. Traditionally it’s considered once the family has flown the nest, for retirement, or when it becomes apparent the task of maintaining, cleaning, and heating a large property becomes too costly or simply too much worry.
But downsizing isn’t just an option for retiring or the elderly. It could be the answer if you want to raise capital in order to clear an outstanding mortgage other debt. In some cases, to free capital to provide a deposit for a child’s first home. And then there is simply the decision to release equity to enjoy life in new ways, realize some long-held dreams.
The majority of downsizers do so before age 65. This might be younger than you thought, but moving home is one of the most stressful life experiences, so many people do decide to do it when fit and able.
If you’ve lived in your family home where you brought up children for many years, it can also be a hugely emotional time. While the move may be a challenge, especially emotionally, broaching the subject of downsizing sooner rather than later, and taking full advantage of the results may make it a little easier.
And freeing up equity really could present opportunities to fulfil those ‘bucket list’ ideas, perhaps the sort travels and activates you’ll want to do that when still feeling fit and strong.
Whatever reason you may have for wanting to downsize, you should take financial advice first and foremost. Not only to ensure all the costs involved with buying and moving home are taken into account, but also to plan what to do with the money you free up. Be that spend, save or invest for your retirement. If you don't have access to an advisor or accountant we can certainly help.
A big change in circumstances such as this does warrant a revisit of your Will. A new property might prompt you to look at a number of measures to avoid or cut inheritance tax. Your Wills expert will determine the best course of action for your circumstances.
Where would you like to move to? carefully consider and research the area you may want to move to. A common way to downsize is to move to a more affordable area, where property prices are cheaper. There is certainly merit in this decision but you want to ensure there are friends and family nearby. Relocating to the countryside may appeal but, as you age, getting around could become problematic so you need to ensure there are transport options. Consider your proximity to shops, a doctor, and any entertainment or sporting options. As you age you want to keep active and ensure easy access to vital local amenities.
You could pay a premium for a home in an area with good public transport links, that's close to shops and a GP/health centre. Sometimes retirement hotspots such as Dorset, Devon, Cornwall command higher prices. Whilst spending more on your new home may be an option for you, people generally free up equity.
Equally important is what kind of property will you want? If you want to move to a bungalow for the ease of living on one level, you may find these are in short supply, and competition to buy could be fierce. It’s likely to determine certain areas, suburbs. Retirement blocks or villages are options to explore but can be very expensive to buy with inherent ongoing charges. New builds are a very good option. And you may even consider an apartment, but there are certain considerations to make with more communal living and shared costs to consider too.
We can certainly confirm that a reputable, local estate agent will be able to offer a wealth of useful information, facts, and figures when it comes to researching both areas, property type, and availability.
Consider how much space you'll actually need – what larger pieces of furniture do you want to keep? Will the likely type of property your buying accommodate them? It might be time for the grand piano or dining table for 12 to go to auction. Once you’ve settled on the type of property you’ll be buying, draw up a realistic floor plan so you can see what will fit in each room without it being too cluttered, and compare to your existing home.
Also, think about any guests you might regularly receive; will you need one or more spare bedroom? Where will the grandchildren sleep? And what about your hobbies and pastimes? Try not to compromise on space for those.
When looking at items to, well, get rid of, be practical. If you’re moving to an apartment with a balcony then time to sell the lawnmower. If you’re moving from a five-bed house to a two-bed you’ll have to get rid of the extra beds, mattresses, duvets, bedside cabinets, and maybe matching wardrobes.
Go through your bedrooms, tackle the loft and garage ASAP!, and the kitchen will likely have excess everything! Do you have tools in the shed, in fact, is the shed included in the sale of your property? Are there spare TVs, how about large exercise equipment? What about valuable but soon to be redundant artwork or other items in the dining or spare rooms?
You can probably sell the vast majority of items you no longer need, perhaps at car boot sales or of course online via websites such as eBay or Gumtree.
Charities will be happy to take some items. They’ll welcome clothes, bedding, toys. Certain items will be more difficult for them. Charities may be unwilling to take electronic devices, and large items of furniture. If you can’t sell them, you’ll need to consider the recycling centre.
If there are certain heirlooms or even large items such as furniture or vehicles you plan to leave to your family in your will, consider giving those gifts now. You’ll get the items out of your way, and you’ll be able to enjoy giving those items to your loved ones and seeing them used. And why not find out if there are any items your children or even friends might want that you don’t know about — you might find an easy way to make them happy and not have to recycle etc.
Using a removal company is very likely the best option, it may have been a while since you last moved home and forgotten quite how hard it is, let the professionals take the strain, literally.
Hiring a removal firm will cost anything from a few hundred to several thousand pounds, depending on your property size and the distance you are moving.
Reputable firms are listed at the British Association of Removers or the National Guild of Removers and Storers. Do check your home insurance policy and any cover provided by the removal firm, and exactly what this covers, you’ll want all of your possessions covered for damage, loss, or theft.
Ask for a written quotation from your chosen removal company to make sure you don’t end up with extra fees, it’s their responsibility to consider all factors and costs.
You can save money by packing yourself, plan and allow plenty of time, it really will take at least twice as long as you think. But it’s a good opportunity to finally sort what moves with you and what gets recycled etc. or you could save time and pay extra for a removal company to pack for you.
Check that they have insurance and what sort of damage this covers as you may not be protected if you pack your own items but they then get broken while being moved. Your home insurance may also provide some cover for removals.
If you have any questions at all please get in touch, we’d love to hear from you.
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