Half of homeowners want to downsize
Lloyds TSB found that the reasons for downsizing have broadened in these tough economic times. While 59% want to move to a smaller property that is better suited to their circumstances, a third of potential downsizers would like to move to a smaller property to help reduce bills.
Almost two fifths would like to free up equity in the property and almost one in three said they want to downsize to help support retirement plans.
A fifth of those considering downsizing are looking to trade down earlier than expected, with the majority citing financial concerns as the key driver.
The research also highlighted that homeowners of different ages are now considering downsizing it as an option. Unsurprisingly over 60% of potential downsizers are over-55s but over one in four are aged between 46 and 55 and over 5% are aged between 36 and 45.
Homeowners at different stages of the property ladder are also looking to downsize to a smaller property in the next three years. Almost half of homeowners living in their second home are considering trading down.
Stephen Noakes, mortgage director at Lloyds TSB, said: “Downsizers are now playing a key role in the housing market and as the study shows we are starting to see homeowners on different stages of the property ladder considering it as a sensible option as more and more families are looking at ways to save money.
“Whilst we have seen a significant rise in the potential cash windfall, downsizing can make a lot of sense for a wide range of people, it is important to consider carefully whether trading down is the best solution. Whether you are looking to lower utility bills, pay for an offspring’s tuition fees, or free up extra cash for retirement we recommend you seek professional advice before taking action.”
Trading down from a detached home to a bungalow would have earned an average windfall of £97,298 in 2012 – an increase of 41% since 2002.
Regionally, Yorkshire and Humberside (84%) saw the biggest increase in the average windfall, followed by the South West (7%). In monetary terms, Londoners typically receive the highest windfall (£269,415) from trading down.