Should I Downsize to Smaller House in the East Midlands?

Our lifestyles evolve over time, and downsizing your house may help you to adapt. Your reasons could be financial, personal or practical, but it’s important to understand what downsizing entails.

The Rutland house you chose for its good schools, or the Northamptonshire home near your former workplace, may no longer be the right fit once your children have grown up or now that you’ve retired. There could also be a financial incentive. As highlighted by This Is Money, the average selling price in many East Midlands areas has risen in the last decade, and downsizing could release those gains.

Before you decide whether you should downsize, read our guide. We explain the essential facts to consider when moving to a smaller house in the East Midlands.

What does downsizing mean?

Downsizing means moving from a house to an apartment, or simply from a larger house to a smaller one. Property size may be the primary factor, or you may downsize to release value tied up in your home or reduce your monthly costs. This sometimes includes moving to a new, rural place to live in the countryside where you can enjoy a slower pace of life.

What is involved in downsizing my house?

When you downsize, you will have to sell your current larger home and find a suitable smaller home to buy. Start by finding a good local estate agent to market your current home and help you search for a new one. Consider the number of rooms and must-have amenities you want, and research the local property market to establish the properties available in your budget and preferred area.

You will also need to declutter thoroughly. Not only can this make your property more appealing to buyers, but your furniture and personal possessions will need to fit in a smaller home, which typically equates to less storage space.

Should I downsize my house in the East Midlands?

You may want to downsize your house on retirement to relocate to your dream location, or find a smaller home as an empty nester. If cleaning a larger home is getting too much, or you have accessibility concerns, downsizing may sound appealing.

You could downsize to a smaller property with a more affordable mortgage, or with a view to releasing equity. As reported in Landlord Today, Rightmove’s analysis reveals that downsizing from a 5-bed to a 3-bed home in the East Midlands could unlock 58% of your property’s value. Of course, that’s an average figure, but the potential is there.

However, avoid rushing into anything and think long term. Speaking to a financial adviser may help you establish whether now is a good time to downsize your house.

Costs of downsizing your house

Downsizing can save money in the long run, but there’s the cost of moving to consider when you buy or sell any property. These are some of the initial costs of downsizing:

• Stamp Duty
• Removals
• Conveyancing fees
• Estate agent fees
• Solicitors’ fees
• Surveying

Downsizing house pros & cons

Moving to a smaller home may seem like the answer, but it’s a good idea to take a balanced view to decide if downsizing is worth it.

Pros of Downsizing

• A smaller property can be easier to maintain
• You could relocate nearer to family members
• A smaller space often means cheaper utility bills
• Downsizing to a cheaper property could let you release equity
• Moving closer to transport links, shops and clinics can be valuable in the long term

Cons of Downsizing

• It can be hard to leave your family home
• There are the costs of downsizing to consider
• Smaller homes offer less storage space
• You will have fewer rooms for visiting friends and family

Do you pay Capital Gains Tax when downsizing your house?

Private Residence Relief rules mean homeowners don’t usually pay Capital Gains Tax (CGT) when you downsize a house that was your main residence. However, if you inherited it, part of your home was used exclusively for work purposes, the grounds cover 5,000 square metres or you have rented out your property, you may pay CGT when you sell. Find further information on Capital Gains Tax and moving house on gov.uk.

Alternatives to downsizing your house

Downsizing may not be right for everyone, and there are other options to consider. Equity release through a home reversion scheme or a lifetime mortgage, borrowed against your home’s value, could let you continue to live in the property. However, there are legal and financial implications.

Understand house downsizing in the East Midlands?

If you’re considering downsizing your house, hopefully these tips have offered you some insight – take a look at the paperwork needed to sell a house to help you transition smoothly. Our team will be happy to help you take those plans further. To discuss selling your current home or finding a new property in Oundle, Oakham or across the East Midlands, contact King West today.