Some 43% of downsizers want a smaller property to help reduce bills and 37% see downsizing as a way to help support their retirement plans, says the report from Lloyds Bank.
An average of £97,722 can be potentially raised by downsizing home with London the most lucrative place to do so, with an average amount of £272,000.
The research also found that 45% of home owners planning to sell their property in the next three years saying they’d like to downsize. Some 31% said they were looking to free up equity so they could re-invest in something other than property or a pension, 12% wanted to invest in a pension and 18% said they would give money to their family and 29% of those considering downsizing are doing so earlier than they expected.
Some 32% of downsizers are looking to move to a detached house, 26% to a semi detached house, and 45% are looking to move to a bungalow.
The report points out that while those looking to retire may be the key population within the downsizing market but, in a continuing tough economic climate, it is an option being widely considered by younger generations, too.
The survey showed that the average age of those looking to downsize was just 40 years old, with 26% of potential downsizers aged just 26 to 35, 26% aged 36 to 45 and 24% was made up of potential downsizers aged 46 to 55.
For those trading down early, the potential amount that can be raised by downsizing from a detached property to a bungalow has risen by 12% or £10,221 over the past decade. A downsizer today would receive an average of £97,722 compared with £87,501 in 2003, according to the bank’s calculations.
The potential amount of cash home owners could raise by downsizing their property from a detached home to a semi detached would have earned an average of £116,474 in 2013, an increase of 13% or £13,910 since 2003.
But there are regional variations. Buyers downsizing from a detached home to a bungalow in the North saw the largest average increase of 35% or £20,360, followed by the East Midlands and the North West, which both saw rises of 23%, or £13,605 and £17,088 respectively, and the South East at 20% or £27,026, the largest rise in monetary terms.
Downsizers in London stand to make the most in monetary terms, with a downsizer in Greater London typically standing to make an average of almost £272,000 from trading down from a detached to a bungalow.
On the other hand, those moving from a detached home to a semi in Scotland saw the largest overall increase in the average amount that could be made, at 22% or £17,657 over the past decade, followed by the South East and East Anglia, both 17%.
According to the report, while 34% of home owners considering downsizing have lived in their current property for between 11 and 20 years and 19% have lived in their current property for between 21 and 30 years, many are choosing to move a lot sooner. Some 23% have only lived in their property for between six and 10 years and 11% have lived in their property for just five years or even less.
‘There is no question that downsizers have a key role to play in the housing market, especially in a climate where it’s not just those looking to retire who want to free up equity from their home by moving somewhere smaller,’ said Marc Page, mortgages director of Lloyds Bank.
‘Many families view downsizing as a sensible way to lower their bills, help out their children or free up funds for retirement. However, selling your home is not a decision to be taken lightly. It’s important to give careful consideration to whether trading down is the best solution for you and to seek professional advice first,’ he added.
