Is it too soon to downsize?

[downsizedilemma]

Thinking about downsizing, and would appreciate a critical friend perspective from the sharp minds of Mumsnet.

I am late 40s, single, with a teen still at home. I have about £60k still to pay on my mortgage. My house is fine but I don't love it. Thinking of downsizing to a flat in the same area to pay off my mortgage and have some money in the bank for a house deposit for DC in future. I am planning a career change which will mean I will be earning less so it would be great to have smaller outgoings.

I would be giving up outside space but that doesn't bother me too much as I don't enjoy gardening and there is lots of nice public green space around here.

Is there anything I should be considering financially before taking the plunge?

@GOODCAT So many moving parts aren't there! I have an aging relative as well as a teenager in the mix. I think I will want to stay here in retirement as my friends and networks are all here - plus I'm likely to carry on working part-time. But who can really tell what the future brings? I can imagine if all my friends moved away I'd be much less likely to stick around.

I think you should do it if you’ll be happier in your day to day life. Not everything is about optimising financially. But even so, there are decent Savings accounts about at the moment where you could park the money and get a good return for your DCs future deposit.

I'm desperate to downsize into a 3 bedroom house which would still give us a spare room. DH point blank refuses. We argue about it sometimes. I'm fed up of having to clean empty rooms and higher utility and council tax bills than we'd have in a smaller property. I'd rather downsize and give our 3 x DC money now. I'm pretty certain one of the reasons holding him back is he has a huge double garage and 2 large sheds in the garden. He has them packed full of tools he hardly uses but likes having. He knows some of them would just have to go. Another reason is he likes the big garden with a full size cricket net in. If we downsized the garden would likely be smaller. I have told him we can hunt around for a 3 bedroom with a good sized garden but he's very stubborn.

I'm 50'and just about to buy a 7 bed house with the 3 of us so maybe I'm crazy .

In your position I'd hang on or buy a small 2 bed as a flat is often tricky to live in if you hate it you won't be able to go back .

I think you need to be careful. My family member downsized to a one bed flat in their early 40s. They wanted to be mortgage free, and reduce their working hours.

Now they are just retiring and want to move (don't like the area anymore), but they can't afford to go where they would want. Their flat hasn't risen in value much (it is worth around £90,000) as the area has gone down hill over the past 25 years, and the place they want to live is more expensive. They didn't save any money during those 25 years as were only working part time.

Whereas, if they bought a bigger property originally then they could have "downsized" now to the nicer area - even if they didn't "save" money by downsizing (e.g., originally a 3 bed house for £200,000 and downsize to a one bed flat that costs £200,000).

Be careful at reducing to the bare bones too early in life. You might limit your options later on.

I wouldn’t ever live in a flat again due to noise & bad neighbours. It can be awful in a flat. I would concentrate on your own needs & happiness rather than giving your DC a house deposit. They may get a great job & make their own way in life.

Oh I would downsize if I were you!

But I would be cautious about buying a flat. If you can get a really modern one you might be okay but you need a ground floor one to future proof yourself. But even then you will be surrounded by more people with the potential for more noise. Flats are also harder to sell.

From the money aspect I think you might gain more interest in the bank as opposed to a house in the near future.

I've been thinking about this again this morning. It does seem to me that the thing that is driving you is wanting to be mortgage free rather than wanting to downsize. Wouldn't it address your needs best if you simply focussed on paying off your mortgage ASAP? I know it seems impossible, but if you see this as the point of focus, and threw every spare penny, did all the trad things like ebaying and generating extra income and put everything into overpayment, I think you'd be surprised how much you can generate. I know I managed to throw £17k into this pot during a year when I was unemployed (I still have no idea how I did this, except I did have a lodger, and yes, the benefits people did know about that). Even now, when I am sitting on a healthy pension pot, I do things like surveys, inputting all my receipts into apps etc, and these amounts do mount up!

My motivator was that I worked out how much I'd repay over the life of my mortgage, and realised that every £5 I threw at it would actually save me £10 in the long term. And paying off the mortgage, rather than downsizing, means that you have a substantially larger asset in your portfolio....