If you've been considering downsizing your property, the time may be ripe to make the move. According to the latest Downsizers Report from Lloyds Bank, switching a detached house for a bungalow could now release an average of £103,715, while a move to a semi-detached property could free up even more, with the average semi-detached downsizer raising up to £121,686.
A key driver of property moves in the UK is the desire to live somewhere smaller, with over half (52%) of those questioned who plan to sell their home in the next three years citing this as a factor. And it seems that making the move now could put more money than ever before into downsizers' pockets.
According to the report, the potential amount that could be raised by downgrading from a detached home to a bungalow has risen 8% over the last decade, with an extra £8,081 going to sellers. Those looking to move from a detached home to a semi-detached are also better off than they were in 2004, profiting from an extra 6% (£6,943) cash return.
The average downsizer is around 56 years old and has lived in their current property for about 11 to 20 years, so if this sounds like you, then now may be the perfect time to think about trading down.
The money released from downsizing can open up a great deal of investment options. For instance, in the report, two in five survey respondents (43%) said that they planned to invest the money in a new property - potentially resulting in reduced mortgage rates as you'll have a bigger deposit - while a quarter (26%) stated that they intended to invest in other financial products. You could also give your retirement savings a boost by adding some of the cash to your pension.
Trading down to a smaller property can also enable your changing lifestyle needs to be met. Almost two thirds (63%) of those questioned said that they wanted a smaller home because it would better fit their present circumstances, while changes in health, relationship status and proximity to services also featured in other downsizers' list of reasons for trading down.
Moving to a smaller property can also give you longer-term savings. Two in five (40%) survey respondents said that they wanted to reduce their outgoings and bills and over a quarter (26%) were downsizing in order to move to a more affordable area.
"Once people do look to trade down, the benefits are clear," commented Andy Hulme, director of Lloyds Bank. "Downsizing can generate significant amounts of money [and] it also helps to lower the cost of household bills and frees up funds so that people can enjoy their retirement or invest their money for the future."
Downsizing can also benefit others in the housing market, added Hulme. "Downsizing is clearly still a major part of the housing market… The volume of downsizers is therefore helping to keep the market moving, freeing up larger properties for those making their way up the ladder."
So, is it time for you to think seriously about downsizing? If so, you could stand to make a decent profit as well as find a new property that can be a perfect home for many years – why not take a look at the market and see what you can find?
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