A new report from Lloyds Bank shows that downsizing continues to be a strong driver of property sales, with almost half (45 per cent) of homeowners planning to sell their property in the next three years saying they’d like to downsize.
More than a third of potential downsizers (37 per cent) want to support their retirement plans and nearly half (43 per cent) said they wanted to reduce their bills and outgoings.
Nearly a third (31 per cent) said they were looking to free up equity so they could re-invest in something other than property or a pension, more than one in ten (12 per cent) wanted to invest in a pension and almost one in five (18 per cent) said they would give money to their family. 29 per cent of those considering downsizing are doing so earlier than they expected.
A third (32 per cent) of downsizers are looking to move to a detached house and a quarter (26 per cent) to a semi-detached house, while almost half (45 per cent) are looking to move to a bungalow.
Those looking to retire may be the key population within the downsizing market but, in a continuing tough economic climate, it is an option being widely considered by younger generations, too.
The survey showed that the average age of those looking to downsize was just 40 years old, with a quarter (26 per cent) of potential downsizers aged between 26 and 35.
Those aged 36 to 45 and those aged 46 to 55 both made up a quarter of the number of those looking at smaller accommodation.
For those trading down early, the potential amount that can be raised by downsizing from a detached property to a bungalow has risen by 12 per cent (or £10,221) over the past decade – a downsizer today would receive an average of £97,722; compared with £87,501 in 2003.
The potential amount of cash homeowners could raise by downsizing their property from a detached home to a semi detached would have earned an average of £116,474 in 2013; an increase of 13 per cent (£13,910) since 2003.
According to the report, while a third (34 per cent) of homeowners considering downsizing have lived in their current property for between 11 and 20 years and one in five (19 per cent) have lived in their current property for between 21 and 30 years, many are choosing to move a lot sooner.
Nearly a quarter have only lived in their property for between 6 and 10 years and 11 per cent have lived in their property for just five years or even less.
Lloyds Bank mortgages director Marc Page said: “There is no question that downsizers have a key role to play in the housing market, especially in a climate where it’s not just those looking to retire who want to free up equity from their home by moving somewhere smaller.
“Many families view downsizing as a sensible way to lower their bills, help out their children or free up funds for retirement. However, selling your home is not a decision to be taken lightly.
“It’s important to give careful consideration to whether trading down is the best solution for you and to seek professional advice first.”