Downsizing to a Smaller Home: A Quick Guide
Whether you’re looking to cut your household bills or want a change of scenery, downsizing your home could be the answer. If you’re wondering what this means and how it works, we’re here to help.
Read on to learn more about the pros and cons of downsizing your home, things to consider and the options available.
What does downsizing your home mean?
Downsizing means moving to a smaller or less valuable home. People choose to downsize for different reasons, from struggling with the upkeep of their homes to releasing equity to finance their retirement.
The pros and cons of downsizing
Downsizing your home has advantages and disadvantages. Below are some of them.
| Pros | Cons |
| By moving to a smaller house, you can release equity*. |
A smaller property means less living and storage space. |
| Downsizing your home means lower maintenance and household bills. |
You’ll need to factor in moving costs, including Stamp Duty. |
| You can find a better location and improve your quality of life. |
Leaving the home you’ve lived in for many years can be difficult emotionally. |
*Home equity is the difference between the amount you owe on a mortgage and your home’s value. If you decide to sell and downsize, you can release the equity you’ve built up to pay off the mortgage. If you’ve repaid it, any surplus money is yours.
For instance, if you sell your home for £300,000 and buy a flat for £150,000, this frees up £150,000, provided you’ve repaid the mortgage.
Things to consider before downsizing
If you’re considering downsizing your home, asking yourself the following questions can help you make a decision:
• Reasons – Why do I want to downsize?
• Time – Is now the right time to downsize?
• Location – Does it suit my needs for the future?
• Property – What property type would suit my needs best?
• Mortgage – Do I want to pay off my mortgage before selling?
• Costs – Can I afford the extra costs, like estate agent and conveyancing fees, as well as survey and removal charges?
Once you have a clear answer to these questions, start preparing your home for sale. Declutter and get rid of everything you no longer need to reduce removal costs.
Our guide to selling your home has plenty of tips to ensure a smooth process. We also have fantastic Help to Sell schemes for a hassle-free move.
Downsizing options
If you’re ready to downsize, some of the options include:
• Downsizing to a smaller home
• Moving from a house to a flat
• Moving into a bungalow
• Buying a retirement property
• Buying a shared ownership home*
*Buying a home through shared ownership means buying between 10% and 75% of its full market value. You pay rent to the landlord on the part you don’t own, as well as ground rent and service charges.
If downsizing your home is the right choice for you, our Barratt homes offer maximum comfort and contemporary features. Our 2 bedroom homes are perfect for downsizers, providing practicality without compromising style. They’re energy-efficient and sustainable, helping you keep utility costs at bay.
Browse unique homebuying offers and low-deposit schemes. Contact our Sales Advisers today to get started.
FAQs
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Some pitfalls of downsizing includes potentially losing space and amenities that you're used to, unexpected costs with moving such as legal fees, survey costs, and choosing a smaller home that is unsuitable for future needs.
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If you are selling your current home and purchasing a new smaller one when downsizing, you may still have to pay stamp duty, depending on the value of the property you are buying. Most people downsizing to a less expensive property are exempt from capital gains tax, meaning all the equity that is released by downsizing your home is tax-free.
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When downsizing, it's important to avoid rushing into a decision, underestimating the true cost of moving, and ignoring potential health and mobility needs that may require certain amenities or features in your new home.
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Benefits of downsizing to a smaller house can include lower maintenance and utility costs, a simpler and more manageable living space, the potential for increased financial flexibility, and potentially living in a location that better suits your needs or lifestyle.
Our Offers to Help Get You Moving
Help to Sell
If you’re looking to start your next adventure, but are worried about the hassle of moving, we have a range of schemes available to help you sell your existing home.
Part Exchange
We could be your guaranteed buyer, so no stress or fuss, just an easy move for you and your family.
Low Deposit Offers
If you have a low deposit, we have a variety of schemes available to help make moving more affordable.
Own New - Rate Reducer
Own New - Rate Reducer is a brand-new scheme available on new build homes that could mean lower mortgage rates and reduced monthly payments.
Movemaker
We could help you arrange to sell your existing home, so you'll have no estate agent fees to pay.
