Your property could be worth a small fortune – so why not unleash those hard earned funds by moving into a smaller home?
It’s the d-word that causes needless worry amongst settled homeowners – the dreaded act of downsizing. But for many people moving to a smaller property makes a lot of sense financially – especially if your children have flown the nest.
For starters, a more compact home means minimal maintenance, less council tax and cheaper household bills, giving your finances a big boost and allowing you to spend more money and time on treats, hobbies and travelling.
Then there’s all the capital that can be freed up from selling a property and buying something cheaper and more modern. And the good news is that provided you are selling your main home, you won’t have to pay capital gains tax on any profit.
There’s also something to be said about being liberated from the tyranny of household chores!
In addition, although uprooting yourself from a home you have lived in for years can be daunting, it can also be very exciting moving to a new location. And who knows, you could consider buying in an up and coming neighbourhood, meaning your cheaper home could increase in value in the years to come and give you an extra nest egg.
How do I know when it’s time to downsize?
Many people downsize because they want more money in the bank and to spend less time on maintenance and bills. However, downsizing can be difficult if you have an emotional attachment to your current home and you have too many worldly possession to fit into a smaller property. Then again, sometimes downsizing is not a lifestyle choice and could be the unfortunate result of a relationship breakdown or job loss.
But before you make any decisions make sure you do your research. Consult several local estate agents about your plans to get a good idea about how much you are likely to make from selling your home, and where you could afford to move to.
Are there any downsides to downsizing?
Whilst you may be selling up to release equity from your estate, downsizing can be an expensive move. Remember, stamp duty, estate agent’s fees and legal costs all apply, which could total several thousand pounds depending on the value of your home.
And the upsides?
Downsizing is a good chance to move somewhere new and exciting. You could relocate into a modern flat in the city centre, where you’ll have access to restaurants, theatres, parks, shopping centres, art galleries, gymnasiums and much more.
It’s also a good opportunity to have a thorough spring clean in your home and get rid of any excess baggage.
What do I do with all my possessions?
If you have too many possessions to fit into your smaller home you could let your children, family or friends rummage through furniture or items you want to get rid of.
If that doesn’t solve the problem, there are many ways to off load your lot, and you can make some extra cash in the process. Why not try:
- A car boot sale
- Giving the items away to charity
- Auctioning off valuable items
- Advertising on auction or second-hand websites such as eBay and Gumtree
Alternatively, if you just want rid of household bits and bobs, you can advertise them on Freecycle. This is a website where you advertise things for no cost, and those who are interested pick them up for free – with the idea that usable items are not dropped off at rubbish tips.