Thinking of Downsizing? Things to Consider.
The thought of downsizing your home may be something you’d thought about for years down the line when the kids have moved out and you’re getting older; but more people are considering downsizing their property to make all-important savings. For example, choosing a smaller property could help to increase cash flow with reduced mortgage repayments and lower energy bills.
Owning a property is a massive expense and something that has become increasingly hard in these current financial times. That’s why more UK homeowners are now downsizing years earlier than they may have thought they would.
By downsizing your property you can save on mortgage repayments; leaving you with more money each month to meet other financial needs and to increase your savings. Equally, with a smaller property, your utility bills are also reduced as the home takes less heating and power to run. This is particularly advantageous with the rising energy prices and when these are coupled with mortgage repayments and home maintenance it can often become crippling.
What to consider when downsizing.
This isn’t something that you should rush into as there are many factors that need taking into consideration when choosing to downsize your home. For example, if you’re living with various family members their thoughts need taking into consideration and how a move will affect them. If you’re moving your children, could it affect their schooling and education?
A smaller property will also mean a reduced amount of space and storage, so you may need to look at what you might have to sell if you downsize. If you can’t visualise the space to start off with, it may be a good idea to look at temporary storage facilities until you get used to the smaller space and can assess what you do/do not need. Equally, you may need to sell bigger items of furniture such as sofas and sideboards for smaller items to create more space in your new home.
Don’t just think about the space for you and your family but for any guests that may frequent the property. If you regularly have family/friends round, will this hospitality be able to continue in a smaller space? This is something that should be considered carefully as it may be a big part of your lifestyle, and while downsizing may save you money, you need to assess how it is going to affect your lifestyle too.
Property prices & downsizing.
Another thing to consider is just how much money you are going to save with the property prices and downsizing. Over the past few years UK house prices have become very stagnant and in a lot of cases they have been dramatically reduced. Therefore, you may be losing money when selling your home, which will significantly reduce the margin between your current property and the smaller one you are considering buying. Therefore, it could be an expensive move that won’t save you much money with your mortgage repayments – so carefully calculate all aspects of this before choosing to downsize.
Things such as estate agency fees, stamp duty and solicitor fees are other costly elements that will be involved in any property move, not just downsizing. So always add in these costs when evaluating the pros and cons of your move.
Things to consider when downsizing.
Before going ahead with downsizing your property, ask yourself the following:
- Is this the right move for my family; will the children’s educational needs be met?
- Will it affect our lifestyles; e.g. will we still be able to entertain family and friends?
- Will we be able to take all of our belongings with us; and if not are we going to have to put them into storage or sell them?
- Do we need the extra space?
- Is this the right financial move for us?
Assess all of the above key points thoroughly before making any decisions about downsizing. You need to carefully consider how much money you are wanting to save with this move; remembering to factor in any additional costs (legal fees etc.) before considering what price bracket you are going to look at properties in.
Look for key areas where there may be more of an investment aspect involved; including places where new access roads are being built or an improved bus/train service for commuters. Do plenty of research of this kind, speaking to estate agents and thoroughly looking into the area, latest news and what amenities the area has.
Don’t rush. As much as you may want this to happen, and fast, you need to bargain hard to get the best price for your property, which may mean standing your ground for a while longer in order to get the best price.
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