Should I Downsize My House?

Does your home feel a little roomy? Is there no date yet when those spare bedrooms will be used again? This may lead some of us of a certain age to think ‘Should I downsize my house’? Especially if we live in a house originally bought for family members who have now flown the nest.

Downsizing makes a lot of sense on paper and frequently in practice too. For many homeowners, there would likely be substantial equity to put in the bank or help a family member buy a home. A smaller place may also suit your everyday needs if a large house and garden is more a chore than a pleasure for some. And when we battle cold weather, remember that a smaller home usually has lower energy bills too.

But of course, it’s more complicated than that, and our system of buying and selling homes. Not to mention different taxes – means that downsizing is not for everyone.

Here, are what I see as the possible cons and pros:

The cost of downsizing a home

The most recent estimate for moving costs, including stamp duty, estate agent and legal fees, survey and search fees for your next home, plus removal team expenses, is typically around £11,794. This figure, was estimated using an online moving house calculator on a comparison website. However, this figure can vary significantly, especially if the stamp duty is considerably higher. The type of property this is based on is a home purchased by a non-first-time buyer, valued at £285,000.

Moving house costs and financial considerations

Ideally, you want to sell your house, identify the furniture you want to keep and move into your, smaller, next home at around the same time. But this can be challenging these days.

A recent report by Propertymark, the respected estate agents’ trade body, suggested that within 40% of transactions, it took an average of 17 weeks or more for a house purchase to progress from a seller accepting a buyer’s offer, to exchanging contacts.

So, if you want to secure just the right place you may have to buy and, then possibly, move in earlier. A bridging loan for a few months before you sell your old property is an extra cost. Conversely, if you sell before finding the right alternative, you may have to rent – there’s an obvious cost there, too.

Accepting less space

This may seem oh-so-obvious but think carefully. The advent of Airbnb and budget hotels means there are ways around many accommodation issues. However, if you have family or friends staying often or want the larger room sizes that typically come with a bigger house, you may end up inadvertently, shrinking your lifestyle more than you want. When pondering, ‘should I downsize my house’, consider how often you need the extra space.

Emotional impact of selling your home

Most people’s homes are packed with as many memories as pieces of furniture. You’ll make new memories in a new home, of course. But don’t underestimate the wrench for you and your partner or loved ones.

Please don’t get me wrong on this: the issues above are not disincentives to downsizing but are just a reality check that the process can be more complicated than it first seems.

Yet, tens of thousands of people do downside successively each year – and these are some of the benefits they enjoy.

Financial benefits of downsizing your home

Exactly how much you get in; terms of equity will vary from case to case. The latest data from an estate agency calculated in late 2023 that downsizers across England and Wales unlock an average of £305,090 by moving from a four-bed to a two-bed home.

Even on an average life expectancy of about 20 years for those aged 65, the typical downsizer can provide themselves with £1,218 a month for the rest of their life. Should I downsize my house if I want financial freedom? The figures suggest it could be worthwhile.

And of course, in London and other high-value locations, the amount unlocked could be closer to £500,000.

There are other financial benefits too. Again, the exact figures vary case-to-case but there will probably be lower council tax and daily running costs. For example, a UK price comparison service website, says the average monthly dual fuel bill for a two-bedroom house is £115.14 compared to £228.74 for a five-bedder.

Helping family members by downsizing

Always consult appropriate financial professionals on these issues. It’s often the case, that downsizing is undertaken to help other family members. This could be young first-time buyers or, conversely, older family figures requiring care in later life.

Is downsizing the right decision for you?

It’s perhaps an uncomfortable thought but tending to large gardens, maintaining a big house, or even climbing multiple flights of stairs will be more difficult as we age. Downsizing can be a big step – no pun intended – to future-proofing our everyday lifestyles.

So, are you convinced about downsizing?

In big-picture terms – and this isn’t a reason that will influence any individual, I’m sure – the housing market benefits from a healthy number of downsizers.

It frees up the larger family homes in the shortest supply and allows ‘second steppers’ – people in their second home who want more space as their families grow – a greater choice of new places to live.

If you do take the leap, timing and coordination are key. We have a downsizing checklist for your home. Do consult your local estate agents for the best advice before deciding, ‘should I downsize my house’.

Most of all, good luck – it could just be one of the best decisions you ever make…

Last Updated: January 21st, 2025