Is the time coming to downsize?
It can be an emotional wrench to leave a family home where you watched children grow up, but there are some major benefits of leaving behind an empty nest. Not only will it mean cutting the costs of heating and maintenance, it could release the wealth your home has built up for you.
Estate agency Savills said £21.8 billion was freed up by downsizers in the 2024-25 financial year, an average of about £163,500 per move.
Cutting costs and boosting capital are sound reasons for downsizing. But there are pitfalls. At Continuum we have identified six potential ways to get downsizing very wrong.
1. Rush into it
This will probably be your last move. It’s important to get it right. Take time to talk it through with your family.
Allow yourself months to prepare. Clearing away years of accumulated memories can be painful, but your new home will be smaller, and you need to present your current property at its best to get the best price for it.
Plus, of course, you need to find a suitable place to downsize to.
2. Ignore the cost
The average downsizer will buy their new home for about a third less than they sell their old one for.
But it’s not all free money. You need to budget for the cost, the stamp duty, the estate agency’s cut and legal and removal fees. The cost of moving is about £20,000 on average. You also need to take into account renovations and decoration.
Even more important, if you are buying a retirement property, look at all the details with a solicitor. Service charges can be high and rise rapidly. Contracts can have hidden – and costly – pitfalls.
3. Buy in the wrong location
You might already have your eye on a little place just around the corner, but many downsizers move to a new area without looking at the practicalities. Your holiday favourite might be bleak and unwelcoming in winter. A home in the country or by the sea is appealing, but think about transport links, closeness to family and local amenities. You may be happy to drive now, but you might not be in the years to come.
4. Buy the wrong property
You need to feel comfortable in your new home, and you won’t want to downsize again. You may need room if you want children or grandchildren to stay, but there’s no point in buying space you don’t need.
Think about maintenance. You might feel confident about your DIY skills and relish a large garden now, but you might find things very different in a few years’ time. Moving from a rambling detached house to a newbuild apartment might not be your first thought, but you might want to consider it.
5. Leave it too late
Moving in your 40s can be easy. Many of us will find it much harder in our 70s.
You want to be physically up to the task. And remember, if you are moving to a new area, you will be leaving friends, communities and clubs behind. You may wish to consider moving while you have the time and energy to make rewarding new connections.
6. Get your finances wrong
Your retirement funds will get a boost from downsizing, but you don’t know what the future holds. If you are going to give away some of the money you get from selling, consider your retirement plans.
Think how expenditure may change, even if you have plenty of money immediately after the house move. Always consider the cost of care in the future.
7. Don’t get financial advice
Downsizing means many financial questions. How to use the wealth you release? How to share your new wealth to your children, so it has time to fall out of your estate for inheritance tax purposes? How to use it to provide an income? What about tax?
Make no mistake about it. Get the expert answers with a call to us at Continuum.
Why downsizers are getting stuck on the property ladder
The six downsizing mistakes to avoid — and how to get it right
This article is intended for general guidance only and is based on the opinion of Continuum it does not constitute financial advice. Individual circumstances vary, and you should consider seeking advice from a regulated financial adviser before making any decisions about your Savings, Investments, or retirement planning.
The Financial Conduct Authority does not regulate taxation and trust advice or will writing.
