How do you know when it is the right time to downsize your home?
There are many benefits to moving into a smaller property. Why should you downsize? When is the right time? And what should you do to make sure you get it right?
Downsizing is something that usually happens a little later on in life. Perhaps not quite at the point of retirement, but around this time in our lives, we have empty nests as our children have grown, moved out and have properties and perhaps a family of their own. They don't need their rooms in your home anymore.
There are many benefits to moving into a smaller property. Predominantly financial reasons could be of interest to you when facing a cost of living crisis.
Why should you downsize? When is the right time? And what should you do to make sure you get it right?
Spare rooms: If you have empty rooms or areas of your home that you simply don't go in, then it would be fair to say that you don't really need them. Often these rooms are kept for storing things or perhaps as a guest room that may or may not be required. It is normal to feel like you need these rooms, just in case. Particularly as you've got used to having that space in your home. But, you are either paying to heat a room that you don't use, or you have turned the heating off in that room which could result in problems for the heating system and the potential to create mildew and dampness in the room if it is not heated.
Too much stuff: Do you have things stored everywhere? Perhaps you have items that you haven't used for years? Skis and other sporting equipment? Clothes from years ago that you just do not wear. Maybe look at your belongings objectively - do you have many things you probably should get rid of? Are you simply storing stuff because you have the room to do so? If the answer is yes, consider whether you would take it if you moved. Decluttering is recommended whenever anyone thinks of selling a property because it helps it look clean, tidy, and bigger. If you really decluttered these items, could you comfortably move into a much smaller property? Yes, you probably could.
Too much to manage: Is the property beginning to feel like a burden? When we live in larger properties than we need, we effectively clean and maintain things that we just don't need. As we get older, this maintenance can become more tricky too and particularly with extensive gardens, we can feel as if they are more of a hindrance and start to yearn for a simpler outdoor space that is easy to keep on top of.
There are ways to stay in your large home even if you don't need the room. Of course, we can hire gardeners and cleaners to help us maintain our properties. But as we near retirement, we all begin to consider a simpler life with more free time, and when we stop working, our income earning capacity is reduced, which leads to our final point.
Equity release: Releasing the equity built up in our homes by selling and buying a much cheaper property is a fantastic element to downsizing. Liquidating the equity that is tied up in our homes releases that money for you to spend and enjoy in your retirement. Yes, equity release product options are available, but they usually come with a significant interest payment that will accrue each year and be due for payment when you pass. If you are newly retired, this interest could accrue for 30 or even 40 years! This might be fine for you, but the family you leave behind will be left with the bill to pay.
But, it is possible to release that equity by selling the big house and moving to somewhere cheaper, and most likely smaller, more manageable and more convenient as we reach older age.
If you have a property that is getting a little harder to manage and are considering a downsize in the next year or so, get in touch with our property experts to help and advise on the best way forward for you.