Downsizing your home – the pros and cons

How is downsizing defined?

Downsizing happens when you want to sell your flat or house in order to move into another property that is smaller. There are many reasons why people might want to do this, and it’s something that homeowners of all ages might consider depending on their circumstances.

Elderly couples might want to move into a smaller home once their children have left and grown up, or if they can no longer handle the upkeep of a larger property. In addition, if a partner dies it’s possible that the other partner might want to move into a smaller property. Or if a person needs to move into a residential home, that’s another type of age-related downsizing.

Financial concerns can also be a reason for downsizing no matter the age of the homeowner. If they need to release cash quickly to cover some debt, they might try selling their house or flat and then move into a smaller home that has reduced, and more manageable, mortgage payments.

Or sometimes people simply want a change of scenery and want to own a smaller house because it means less maintenance and it will give them more free time and money.

Whatever the reason behind your decision to downsize your property, you should be aware that there are a number of potential advantages and disadvantages associated with the process of trying to sell your existing house or flat in order to fund the purchase of a smaller next home.

And there are additional factors to consider, for example whether or not to embark on potentially lengthy and costly repair works for your home before attempting to sell it.

Take time to read all about these pros and cons in the rest of this guide, and also to get advice on your various options for how to find a buyer once you are ready to sell your property. You have several choices available, including strategies that can not only get you a speedy sale but will mean that you avoid having to pay any commission – such as selling to a quick buyer.

However you choose to sell your house or flat, the good news is that securing a buyer for the property is possible, putting you on the path to downsizing to your next ideal property.

Should you fix problems with your home before trying to downsize?

You might already have found your future dream home and you’re excited to sell your existing property so that you can make an offer on the new one. But before you do this, you should take a moment to assess whether your property has any problems that you may want to fix before selling.

There are many different issues that can affect all types of properties, including needing to remove asbestos, dealing with dry rot, suffering from a leak in the roof, trying to manage damp, coping with subsidence and more. And unfortunately some potential buyers will see a home with any of these or other issues as being a “problem” property that they don’t want to own.

Other buyers might still be willing to make an offer on your home, but will want to reduce their offer price significantly – at least by the amount of money that they expect it would cost them to fix the problem as the property’s next owner. This is turn would inevitably reduce the possible profit that you could make from the sale, which will not be an ideal outcome for those sellers who are attempting to keep their costs low whilst almost maximising their profit.

Therefore, fixing whatever problems you might have at your home before trying to sell it would have the effect of removing this potential downside from the selling process. Once the issue is resolved, it should no longer be something that discourages buyers or leads to reduced offers.

But there can be downsides with repairing a home before selling, as Bettermove notes. Depending on the scale of the problem, the work could cost potentially thousands of pounds and take months to complete. Neither of those outcomes would be attractive to homeowners that either need to sell their current home as fast as possible, to keep their costs low, or both.

If you do not have the funds, energy or time needed to pursue fixes at your property before downsizing, rest assured that you still have options in order to find a buyer.

One choice is to contact LDN Properties or another no-fee quick home buying company, as they’re known for making fast and fair offers to purchase almost any type of leasehold or freehold house, flat or other residential property no matter their age, condition, location, shape, size or type. You’ll get a competitive offer even if the home has a major problem remaining.

Later in this guide you can read more specific details about the speedy and stress-free process of selling to a quick home buyer, along with information about other methods for selling.

Fees that might be involved with attempting to downsize your property

For many homeowners, trying to keep their costs as low as possible when selling their house or flat is their top priority. That’s why it can be useful to learn about some of the potential expenses that you might incur when you attempt to sell your current property, as they can range from a few hundred pounds up to thousands of pounds, as the HomeOwners Alliance details.

Just note that not all of these costs will apply in every scenario, for example you will only need to pay commission to an estate agent if you decide to use that method to find a buyer. If you instead choose to sell to a zero-commission quick home buying company like LDN Properties then you will avoid paying any fees, whilst also completing the sale within a few short weeks.

Understanding the full range of costs involved with selling your current home in order to downsize to your next property will help you with more accurately budgeting for the change. Some of these expenses can include, but are not necessarily limited to, the following:

Auctioneer fees: If you choose to sell your home through an auction and it manages to find a buyer, you will have to pay the auctioneer commission for the work that they will have done in advertising your home, hosting the auction and overseeing the completion of a successful sale. Many auctioneers charge this fee at about 2.5 percent of your home’s final sale price, although the exact amount may vary, and this commission is subtracted from the sale proceeds.

Estate agent fees: An estate agent will handle almost all of the work needed to find a buyer for your property, and like auctioneers they will charge you commission if they manage to get an offer through to the exchange of contracts. The typical range of fees charged by an estate agent is from 1.15 percent to 1.40 percent of a property’s sale price, but can be higher or lower than this. This fee will be deducted from the final sale proceeds, which will increase your costs.

Conveyancing costs: The conveyancing process involves your solicitor or other legal representative collecting a large amount of information about the next home that you plan to buy, and they will charge for this work. Expect to pay at least roughly £500 in fees for the conveyancing process, although the precise amount could easily be more than £1,000. The fee for this part of the buying process can be higher for leasehold versus freehold homes.

Surveying a property: Conducting a house survey can often be a very expensive step involved with searching for your next ideal property. The exact cost of a house survey might be just a few hundred pounds or over £1,000, and it will be specific based on your unique situation. But it’s yet another expense that you might have to account for when downsizing to your next home.

Discarding belongings: Because downsizing involves moving from one house or flat to a property that is smaller, this usually means you will have a reduced amount of space both within the various rooms of the home and also for storage. That’s why many homeowners who are downsizing find that they need to get rid of a number of belongings, such as furniture for which they either have no use or no space in the new home. Your local authority might offer some free pickup services for these items, but you may also have to pay to have them removed.

Moving expenses: Moving house can be a stressful and time-consuming process, and many people use removal companies to take their household items, furniture and other belongings from the property that they’re selling to their next flat or house. You will need to factor these costs into your downsizing budget, and the typical cost can quickly add up to at least £1,000.

Stamp duty: Once the sale of your current property is completed, you might find that you have to pay the UK government what is known as stamp duty – although it will not apply in every selling situation. Generally, you will pay this fee when selling a property in England or Northern Ireland for more than £250,000, and anything below that threshold is exempt from the fee. Check with a financial professional to find out how much, if anything, you might owe as part of the selling and buying process when you are looking to downsize to your next home.

What are the potential pros of downsizing your home?

There are several different ways that you can prepare your property for sale and some can be either no-cost or low-cost, as a recent blog post by Savills explains. Deciding on which steps are suitable for your situation will depend on a range of factors such as the condition of your home, your funds, free time and more.
You’ll find that there are a wide range of benefits if you decide to downsize your home, including the fact that moving into a smaller property means less maintenance. Your energy, water and other bills should be much lower, and the time involved in keeping the property in good condition will likely be a lot less than in a significantly bigger property.

It can also be a great way to cash in if your home has suddenly increased in value, making a good profit. This could help you to pay off any mortgage you might still have, or give you the cash you need for purchasing your smaller home with money left over. Property websites like Zoopla can be useful to obtain an instant idea of the price at which houses in your neighbourhood are currently valued, although you should use online estimates as only a rough guideline because they are sometimes based on outdated information and might not reflect more recent changes to local property values.

Because downsizing typically means you’ll be moving into a home that costs less to buy than the value at which your current home might sell, you could also end up with leftover extra cash in your bank account. You can then use these funds for other expenditures such as holidays, buying new furniture, or even putting the money in a savings account to earn interest.

When you downsize you also have the luxury of waiting to find the house or flat that gets you what you want from a smaller home. If you need less space in your next home you can take your time to find a house that fits your various requirements. Or if you’re looking to move to a retirement estate you can spend time visiting various options before buying.

And what are the possible cons of downsizing your home?

The ever-fluctuating property market can be a primary reason for staying in your existing house or flat because there’s always the potential that its value could rise significantly in future years. If you downsize and move you run the risk of losing out on making more money on your home.

Another con of downsizing is that house hunting can be a long and tiring process, and you might struggle to find a smaller home that fulfils all of your various needs.

Even if you find a new home that you like and make an offer to buy it, there’s no guarantee that the sale will actually go all the way through to completion. There are many reasons why home sales fall through, and if this happens when you are trying to downsize it will simply put you back to square one in searching for your next property, costing you more time and stress.