According to the new report from Lloyds TSB, 59 per cent of people want to move to a smaller property better suited to their circumstances, a third to reduce bills, and almost one in three to support retirement plans.
A fifth of those considering downsizing are looking to trade down earlier than expected, with the majority citing financial concerns as the key reason.
Older homeowners still play a key role in the downsizing market, but the research reveals that homeowners of different ages are now considering it as an option. So while 63 per cent of potential downsizers are over 55, more than a quarter are aged between 46 and 55, and over five per cent are between 36 and 45.
Homeowners at different stages of the property ladder are also looking to downsize to a smaller property in the next three years. Almost half of homeowners living in their second home are considering trading down, as well as 61 per cent of homeowners in their third home and the same number in their fourth home.
Over two thirds of homeowners considering downsizing have lived in their current property for over 10 years. However, one in five have lived in their property for between six and 10 years and over one in ten for only five years or fewer.
“Downsizers are now playing a key role in the housing market," said Stephen Noakes, Mortgage Director, Lloyds TSB, "and as the study shows we are starting to see homeowners on different stages of the property ladder considering it as a sensible option as more and more families are looking at ways to save money.
“While we have seen a significant rise in the potential cash windfall, downsizing can make a lot of sense for a wide range of people, it is important to consider carefully whether trading down is the best solution. Whether you are looking to lower utility bills, pay for an offspring’s tuition fees, or free up extra cash for retirement we recommend you seek professional advice before taking action.”
Those looking to trade down later in life have seen their potential cash windfall rise by more than 40 per cent over the past decade.
Trading down from a detached home to a bungalow would have earned an average windfall of £97,298 in 2012, an increase of 41 per cent (£28,484) since 2002.
Regionally, Yorkshire and Humberside (84 per cent) saw the biggest increase in the average windfall, followed by the South West (71 per cent). In monetary terms, Londoners typically receive the highest windfall (£269,415) from trading down.
The windfall associated with downsizing from a detached property to a semi-detached property has risen by 46 per cent over the past decade. A downsizer today would receive an average windfall of £120,359compared with £82,412 in 2002.
* 45 per cent of potential downsizers currently live in a detached house
* Almost half of downsizers plan to move to a bungalow.
* Half of potential downsizers believe a third stepper will buy their home
* Three quarters of potential downsizers expect to make a profit when they sell their property.
* 36 per cent plan to invest that money into a new property, over one in ten plan to pass it down to their family and a similar number plan to top up their pension
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