With the current economic climate and the rising cost of living, downsizing may be something that’s on your mind. Moving to a smaller, less expensive home is a great way to free up money, especially if the kids have flown the nest and you find yourself rattling around in a big house only using a few rooms. However, there’s a few factors you should consider before making the big (or small) move!
What does downsizing mean?
Downsizing is when you move from a bigger home to a smaller one which can be due to various reasons, such as your children have moved out of the family home and you no longer need all of the space, the upkeep of the home is too much to handle, or the related costs are too high.
You may also be looking to downsize if you fancy a change and a new chapter in a different area, for example you may have been tied down to a particular location due to a nearby school in the catchment area which your children attended, which may no longer be the case. Whilst many people go through lives trying to upsize throughout their home-buying journey, downsizing may be the right choice for you!
What are the pros of downsizing?
One of the most obvious advantages of downsizing is that it will save you money, however there’s plenty more advantages to take into consideration:
- No mortgage
Smaller houses generally cost less than bigger ones, meaning if you have a good amount of equity in your current house, you may end up with enough money from your sale to be able to pay full in cash for your new smaller home. This would result in lower closing costs as you won’t need a mortgage, and it will reduce the time it takes you to move as you won’t have to deal with all of the paperwork which comes with getting a mortgage. Plus, generally speaking sellers prefer cash buyers as it usually means there’s less risk of the sale falling through, putting you in a strong position to buy.
However, downsizing doesn’t always mean that you’ll have enough money to pay for your new home in full without a mortgage. Depending on the location of your new home and the demand for that area, the smaller home that you’ve got your eye on could still come with a hefty price tag. For example a newly modernised bungalow in an affluent area in the city could cost more than a large three floor terraced house in the suburbs.
- Less upkeep
Although having a large home is what many people aspire to, it also means more space for cleaning and upkeep, and generally a higher maintenance way of living, especially if the property also has a big garden to maintain too. If you downsize to a leasehold property, such a new apartment, not only will you spend less time on the upkeep of the property, but your management company or landlord is likely to take care of the communal areas, garden and general repairs, freeing up some of your time.
On the other hand, smaller properties have a tendency to look more cluttered if you have lots of belongings, so although you may save some time on cleaning, you may need to put some extra effort into tidying up!
- More disposable income
With a smaller house generally comes lower monthly costs, such as lower mortgage payments (if you have one), lower monthly utility bills including electricity and heating etc, and perhaps less costs on upkeep if you used to employ a gardener or cleaner in your previous home. This extra money you’re saving can be used to fund your retirement, enjoy a well deserved holiday, or perhaps even take up a new hobby.
- Less stress
If money was previously a big worry and cause of stress, then downsizing could be a good option to alleviate this. Theoretically, due to you having a smaller mortgage (or no) payment and less costly utility bills, you’ll have more money to spend on other aspects of your life. If you previously used to worry about making your car payment at the end of the month, or whether you could afford to go out for dinner on the weekend, then this extra money means less worrying and stress. Plus, if you’re spending less time cleaning or fixing things up around the house, you should have more time to relax and do the things you really enjoy, resulting in a better quality of life.
- A lower carbon footprint
With a smaller home comes less resources as you won’t be heating or cooling rooms which you don’t use, which in turn has a positive effect on your carbon footprint. Plus, you may be able to spend some of the extra money you’re saving on better insulation, such as double glazing windows or other energy-efficient appliances, which would also lower your carbon footprint.
- A new chapter
Depending on where you want to move to, downsizing could present an exciting opportunity for the next chapter in your life and to experience a new lifestyle. For example, if you’ve lived in the bustling city for the majority of your life but fancy a change to a slower pace of life, then downsizing to a smaller rural property surrounded by acres of land and a traditional country pub down the road could be right up your street. Or perhaps you’ve always dreamt of living abroad to enjoy your retirement in the sunshine; the possibilities are endless.
So, with all of those advantages in mind, what’s the flip side of downsizing and the cons that should be considered?
- The stress of moving
Even when downsizing, buying a new home is still a big move and can be a lengthy, stressful process. You’re likely to have to make certain sacrifices when moving into a smaller home, such as giving away belongings or furniture which take up too much space, and the additional task of actually getting rid of these items whether you decide to donate to charity, sell them or gift to friends or family. Hiring professionals to help with your relocation is one way to limit the stress of moving, and also ensuring you choose the right solicitor or conveyancer for your case so that the process gets off to a smooth start.
Check out our blog post about how to find the right conveyancer or solicitor for you here – How to find the right conveyancer or solicitor? 11 key factors – YouConvey – The UK’s first collaborative conveyancing service (you-convey.co.uk)
- Hidden costs
Although downsizing is generally one way to save money and even make some profit, it’s still important to consider all of the costs associated with moving, no matter where to or what the property size. There’s estate agent fees, conveyancing costs, and possibly storage costs if some of your belongings need to go into storage due there not being enough space in your new home.
Make sure to do your research before you make your decision to move so you can work out how much the move will cost you, and weigh up all your options. It’s also worth trying out an online moving calculator to help give you an estimate of the costs – Cost Of Moving House 2022 – Use Our Calculator | Compare My Move
- Less space
This one may sound obvious, but if you’re known amongst your friends for being the social butterfly who loves having everyone round for dinner and regularly hosting gatherings, then you may want to consider that in your new smaller home this may not be as easy. Additionally, a smaller home means you’ll have to get used to sharing your living space which can be challenging for families with siblings who are used to their own privacy, however this could also be a good opportunity for some good old fashioned family bonding.
- Less storage
Often it’s only when you go to move house you realise how many belongings you’ve actually accumulated over the years, especially if you currently live in a big house with plenty of storage space for those hidden Christmas decorations or excessive amount of bed sheets. The smaller the house, the less storage space so it’s important to declutter before your move and think about some efficient storage options, for example an ottoman bed with storage space underneath it where you can keep plastic boxes with your winter clothes.
- Is this really what you want?
It may seem a no brainer after researching all of the pros about downsizing, but at the end of the day, if you’re used to a home of a certain size and the thought of living somewhere smaller fills you with dread then perhaps this isn’t the right decision for you. It’s natural to feel resilient to moving, especially if you’re at a later stage in your life and you’ve been settled in your family home for many years. So make sure you weigh up all the options and don’t make any irrational decisions that you may regret further down the line.
If you have decided that downsizing is the right option for you, check out this handy downsizing checklist to help fully prepare you for your move.
A downsizing checklist
- Are you happy with your reasons for downsizing, or is there another solution that you should look into such as equity release?
- Where do you want to live, are you happy in your neighbourhood or do you fancy a change in location and lifestyle?
- Look at the type of property that will work for you, is there a lot for you to choose from or will you have to make compromises?
- Declutter! With a smaller house means less space for unnecessary belongings so have a good clear out and perhaps even make some extra cash by selling unwanted items
- Prepare your home for selling
- Start viewing properties and decide on which estate agent you want to sell your home with, and which solicitor or conveyancer to appoint for your case
If you want to make sure you haven’t missed anything off your list when you decide to move, check out our thorough moving house checklist which you can download and print here – Moving house: the most realistic checklist – YouConvey – The UK’s first collaborative conveyancing service (you-convey.co.uk)
Get in touch with us to find out how we can help take the stress and complications out of moving home, getting you into your new home in up to 8 weeks quicker.