As you get older everything starts to become that little bit harder than it used to be – the lawn may take a little longer to mow or the house may become a bit harder to clean. Then there’s the fact that if you still live in the ‘family’ home you may be paying for and maintaining much more space than you need – after all if the kids have flown the nest are those empty bedrooms really needed?
For many more of us, the question of downsizing may become a financial decision, in most instances the property is the biggest asset that we have, but it is also one of the most illiquid. If you find the above familiar then you may well be considering downsizing and moving to a smaller property.
So what are the potential benefits of considering downsizing as you get older and your needs change? Here are some of them:
• Moving to a smaller property will have its financial benefits as it will cost less to run, less to maintain, less to heat and certainly less in council tax – all immediate and tangible financial benefits.
• By downsizing you may be able to release equity tied up in your current property. This money can then be used to supplement your lifestyle, invested to provide you with an income, gifted to family to avoid the potential risk of inheritance tax or put aside as a rainy day fund to cover, say, your future care needs.
• You may be considering moving into a specialised retirement property – such properties are built and designed with the older resident in mind. They are often leasehold but are fully maintained for you, on the outside at least, and will have built in design features to make life easier for you as you get older.
• Such a move may also allow you to move to a new area, nearer to family, or closer to amenities and essential services such as shops and transport with all the potential benefits that this can bring.
• Inevitably it will lead to you de-cluttering your life because not all your possessions will fit into a smaller property – something perhaps we should all consider from time to time.
However, a few words of caution – before you consider whether downsizing is right for you do the sums. If you move you will have to pay estate agents fees to sell your existing home as well as legal fees, stamp duty and removal costs as well.
In addition, if you currently receive benefits then check that if you are releasing cash whether it will continue to affect your ability to claim those benefits. And most of all, think carefully – is the move right for you both now and in the future?