The art of smartsizing
19 December 2012
Read our six-step guide to smartsizing
Downsizing, or smartsizing as we prefer to call it, is not just something that older people do. A recent report by Lloyds suggests that it is now the most common reason for moving for people of all ages.
The Lloyds report noted that the three main reasons for smartsizing are to free up equity held in the property, reduce household bills and to live in accommodation better suited to people’s circumstances.
And it is easy to see why it is becoming attractive. Heating bills are predicted to rise by at least 10 per cent this winter. Perhaps more importantly, the potential cash windfall from downsizing has risen by more than 40 per cent over the past decade. Londoners typically see the highest windfall of nearly £270,000.
While just over half of potential movers are looking to downsize, our experience at McCarthy & Stone shows that the decision to move is far from easy. It is especially difficult in later life when owners may have lived in a property for many years and accumulated a lifetime of items. To help with what may be one of the most important moves they make, we’ve prepared the following six-step plan:
- Choose the right location. It sounds obvious, but the location you choose should match your lifestyle plans, especially if you’re planning your retirement and looking for new activities. This could be a move closer to family which means seeing your children more (or less) often, or taking up a new hobbie.
- Check your future bills. It is likely that your heating bills and other expenses will drop dramatically on moving to a smaller property, and 51 per cent of our customers noted a large drop in their gas bills. However, it’s important to do the sums. Some council tax payments for instance can actually be higher in smaller properties, especially when they are in more desirable areas, so speak to people in the local area first and check online to ensure you’ll be better off.
- Ensure the capital you free up matches your requirements. You may not want to move again, especially in later life, so make sure your move will help meet your financial requirements. If you can, you may want to pass some cash to your children or use it for other investment plans. You may want to use it to fund your pension or your future care needs. Either way, your home equity is a big part of your net worth, so use it wisely.
- Make sure you have enough space. Smartsizing can be an excellent way to de-clutter and to get rid of those unused rooms. But while you may be tired of having too many bedrooms, you never know when they might come in useful again, especially when the kids come to stay (or even return for good).
- Don’t leave it too late. Often, we find it can be a crisis that precipitates a move, such as the loss of a loved one, an accident or an illness. It’s best to plan ahead while you’re in the best of health.
- Choose good advisors. It’s important to select the right professional team that understand the reasons for your move. This includes your estate agent, solicitor and perhaps a financial advisor. It’s important that they have an interest in learning about you and your needs.
If you’re thinking of moving and smartsizing, we’d be happy to help at McCarthy & Stone. We offer our own de-cluttering service and our ‘Move for Free’ service takes away much of the hassle of dealing with local estate agents and conveyencing. Our customer enquiry team can also let you know about the lifestyle benefits of one of our properties. If you’d like to speak to us to plan your move, or if you would like more advice, please call us on 0800 919132 or search for a retirement development and contact the team directly.
View the report by Lloyds and let us know what you think in the comments area below.