Downsizing main reason for people selling homes
Downsizing is now the main reason for people selling homes, according to figures from Lloyds TSB.
One in five – 21 per cent – are downsizing earlier than expected, with a third intending to trade down to help reduce household bills, the bank says.
Just over half (51 per cent) of potential homemovers are looking to downsize within the next three years, compared to just a fifth (22 per cent) looking to trade up to a larger property, according to the latest research from Lloyds TSB.
For homeowners reaching retirement it is common to consider downsizing to a more manageable home.
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Lloyds TSB's report however, found that the reasons for downsizing have broadened in these tough economic times.
While 59 per cent want to move to a smaller property that is better suited to their circumstances, a third (33 per cent) of potential downsizers would like to move to a smaller property to help reduce bills.
Almost two fifths (37 per cent) would like to free up equity in the property and almost one in three (30 per cent) said they want to downsize to help support retirement plans.
A fifth (21 per cent) of those considering downsizing are looking to trade down earlier than expected, with the majority citing financial concerns as the key driver.
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.
"While 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."
Comments from those surveyed included: "The cost of living is making it hard to maintain this house in this location".
"To help save money on bills".
"Because of financial worries".
The reports shows that downsizing is no longer just for "empty nesters".
While older homeowners are still playing a key role in the downsizing market, the research highlights that homeowners of different ages are now considering it as an option. Unsurprisingly, more than 60 per cent (63 per cent) of potential downsizers are over-55s but more than one in four (28 per cent) are aged between 46 and 55 and over five per cent 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 (49 per cent) of homeowners living in their second home are considering trading down, as well as 61 per cent of homeowners in their third home and the same number (61 per cent) in their fourth home.
The report showed more than two-thirds (68 per cent) of home- owners considering downsizing have lived in their current property for more than a decade.