Nearly half of homemovers say they will downsize in the next 3 years

Nearly half of homemovers say they will downsize in the next 3 years

According to new data released by by Lloyds Bank this morning, nearly half of those thinking of moving home within the next three years plan to move to a smaller property, with downsizing being cited as the single most popular factor for moving.

The popularity of downsizing has grown in recent years, buoyed by the anticipated returns. Those thinking of downsizing could reap the financial rewards of trading down their property, as detached home owners could be in line for an average windfall of around £117,2301 if they move to a semi-detached house.

One fifth downsizing earlier than planned

The figures show that average age for a downsizer is 53, at which point the greatest number (37%) of downsizers had lived in their home between 11 and 20 years.

The main reason people cite for downsizing is to move somewhere which better served their circumstances (53%). Other reasons include in order to reduce bills or free up equity (both 39%), or to provide extra cash for retirement (31%).

A fifth say that they are downsizing earlier than they had anticipated, citing reasons such as health, changes in relationship status and a need to be closer to better local amenities. A third also say that they are planning to move to a more affordable area.

Three quarters (72%) of those downsizing said they expected to profit from their move, with 35% saying that they planned to reinvest their additional capital in a new property. 29% said that they would invest in other financial products, whilst only one in five (21%) planned to invest in their pension or pass the earnings on to their family.

Mike Songer, Mortgage Director with Lloyds Bank, said: “People may consider moving home for a variety of reasons, often tied to their next big step in life – whether that’s getting married, starting a family or children growing up and flying the nest.

We typically think of people moving to bigger houses as they move up the housing ladder, but people are increasingly looking to downsize their home because their circumstances or priorities have changed. Whilst financial gain may not be the main driver for those looking to trade down their property it is clearly a factor, with three quarters of downsizers expecting to profit from such a move.

There are definitely financial benefits to be gained from trading down, with an average potential windfall of £117,230 when moving from a detached home to a semi-detached house. Downsizing is also healthy for the market, as it helps keep it moving and frees up larger properties which could be perfect for young families about to take their next step up the property ladder.”


Downsizing in London could raise over £200,000

Unsurprisingly, house prices in the capital mean that London homeowners could make the most from downsizing, as they stand to free up an average of £201,052 from trading down from a detached to a semi-detached home.

Downsizers from the South West saw the highest rise over the last 10 years in monetary terms in what they could gain from moving from a detached to a semi-detached home, with the average price difference increasing by 19% from £109,687 to £130,654.

For those trading down, the potential amount of cash homeowners could raise by downsizing their property from a detached home to a semi-detached stood at an average of £117,230 in 2015; an increase of 1% (£1,260) since 2005.

10 Year % Change in Downsizing Windfall: Detached to a Semi

 

Downsizing windfall, 2005 (£)

Trading down windfall, 2015 (£)

10 year % change

10 year £ change

South West

109,687

130,654

19%

20,967

East Anglia

88,177

101,878

16%

13,702

East Midlands

92,097

103,416

12%

11,319

Scotland

90,308

100,778

12%

10,469

West Midlands

115,726

123,624

7%

7,898

Yorkshire and Humberside

108,594

115,792

7%

7,198

Northern Ireland

61,073

68,005

11%

6,931

Wales

89,784

95,178

6%

5,394

North

90,957

92,651

2%

1,694

South East

178,668

178,904

0%

236

North West

115,499

105,695

-8%

-9,804

Greater London

272,721

201,052

-26%

-71,669

UK

115,970

117,230

1%

1,260

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Latest Comments

AbbieP.
AbbieP. 22 Jul 2016

"While house prices in the most expensive eleven boroughs have declined values in the cheapest eleven boroughs continue to rise" - not a nice way to even out the price range. London is overrated as it

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AbbieP.
AbbieP. 21 Jul 2016

And try to profit from your decisions, I may add

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CommercialTrust
CommercialTrust 19 Jul 2016

Retirement investment has always been one of the biggest draws of buy to let. And the buy-to-let demographic is, on balance, older. (Over a third of our applicants are over 50 at the time of application.) It...

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Forrest Wheatey
Forrest Wheatey 11 Jul 2016

I find the time perfect for ever home-owner wannabe. Prices should slowly, but steadily drop, at least for the inner buyer. Making it harder for outsiders to buy properties (the whole Brexit thing means...

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property guru
property guru 11 Jul 2016

Why should Ajay even have to be looking for it. It should be public knowledge. Why is not just publish each years and to were it is and be AUDITED. Accountability.

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property guru
property guru 11 Jul 2016

Surprise suprise

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CommercialTrust
CommercialTrust 30 Jun 2016

This is great news for buyers and investors in a period of significant uncertainty. The 10-year buy-to-let fix at 3.99% in particular is excellent, a clear 100 bps ahead of the nearest competition. Though...

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Lee
Lee 30 Jun 2016

Let's see what happens to north-east property prices when Nissan announce they're leaving.

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DmitriKara
DmitriKara 29 Jun 2016

I just read another article about eviction rising and this was exactly what was on my mind, Housing has become "cat and mouse"...

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DmitriKara
DmitriKara 29 Jun 2016

I am really not surprised. I've seen one too many impudent tenants and in my humble opinion renters have one too many privileges and options to abuse heir landlord in so many ways...

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DmitriKara
DmitriKara 29 Jun 2016

There is still so much uncertainty and I will surely step back and see what's happening before I could make any decisions on my end.

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ChristinaReedUK
ChristinaReedUK 20 Jun 2016

I don't understand why it's always a war between the two sides. Either, way the landlord is probably keeping a detailed inventory and will see the changes you've made. I just don't understand why there...

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