Once the children have flown the nest or a larger home becomes too much to maintain, downsizing becomes a comfortable option for many people all over the UK. A common reason for this is to use the difference in property values to release money, often to assist with retirement funding or provide financial assistance to a family member.
However, downsizing isn’t always the best choice for some homeowners, especially with alternatives such as equity release available. Before you decide to sell your family home simply to release some of its value, consider these four questions.
1 – Are you ready to leave your home?
Moving somewhere new can often feel like a fresh start, but if you’ve lived in the same property for many years and raised your family there, leaving it behind can be difficult. Every room holds cherished memories, so it’s understandable that lots of people grow very attached to their homes.
If you’re sure that you’re ready for an exciting new chapter that’s great, but don’t feel forced to leave your property if you don’t want to. An equity release scheme would allow you to access some of the money tied up in your home without you having to leave it.
2 – Do you know where you would go?
Feeling happy about moving out is only half of the decision – you will also need to find somewhere that you would live next. This can be a big decision, particularly if you live alone. Relocating to a different part of the country may help you get more for your money, but you might miss the company and support of friends and family living nearby. Staying within a community will mean that if you have car problems or a health issue, you won’t feel stranded.
3 – Will downsizing actually balance the budget?
Depending on your current home and the type of property you’d like to move to, you may find that you are left with less capital than you had imagined. You should also factor in the costs of moving, like estate agents’ fees, conveyancing fees, the price of a survey, stamp duty and removals. Even once you’ve moved in, ongoing costs of living (like bills, management fees or ground rent) can all add up.
Have your home valued by an estate agent or surveyor and research the price of properties that you would be happy to move to, looking at their size, location and amenities. Compare the difference in house prices and the cost to work out whether a potentially-stressful move is worth it financially.
4 – When is small, too small?
You might be tempted to buy the smallest home you can find, focusing on how easy the housework will be and how little furniture you’ll need. This might be a disadvantage if you’re used to family and grandchildren coming to visit – never underestimate the value of a spare room! You will also need to get rid of a substantial amount of your belongings, which you might not be ready to do. By staying in your current property, you can hold onto all of your most treasured belongings and simply have a thorough de-clutter of all the items you don’t want.
If you decide that you’re not quite ready to move out of your home, an equity release scheme may be a good option to access some funds. Just like moving, equity release isn’t for everyone so if you want a free consultation to discuss your situation, please get in touch. You can find answers to commonly asked questions about how equity release works here.