Around 43 per cent of downsizers want a smaller property to help reduce bills and a third regard downsizing as a way to help support their retirement plans, claims a new report from Lloyds Bank.
Almost half of homeowners planning to sell their property in the next three years say they would like to downsize. Over a third want to make the move to support their retirement plans and nearly half say they wanted to reduce their bills and outgoings.
Nearly a third are looking to free up equity so they can reinvest in something other than property or a pension, around one in ten want to invest in a pension and almost one in five will give money to their family.
Roughly 29 per cent of those considering downsizing are doing so earlier than they expected.Almost half are looking to move to a bungalow.
Interestingly, the survey showed that the average age of those looking to downsize was 40, with a quarter of potential downsizers aged just 26 – 35.
"There is no question that downsizers have a key role to play in the housing market," said Marc Page, Mortgages Director, Lloyds Bank, "especially in a climate where it’s not just those looking to retire who want to free up equity from their home by moving somewhere smaller. Many families view downsizing as a sensible way to lower their bills, help out their children or free up funds for retirement."
The potential amount that can be raised by downsizing from a detached property to a bungalow has risen by 12 per cent (£10,221) over the past decade, so a downsizer today would receive an average of £97,722, compared with £87,501 in 2003.
Buyers downsizing from a detached home to a bungalow in the North saw the largest average increase of 35 per cent (£20,360), followed by the East Midlands and the North West, which both saw rises of 23 per cent (£13,605 and £17,088 respectively) and the South East (20 per cent or £27,026 – the largest rise in monetary terms).
Downsizers in the capital stand to make the most in monetary terms, with a downsizer in Greater London typically standing to make an average of almost £272,000 from trading down from a detached home to a bungalow.