To not understand downsizing as a means to release cash?

[Shinynose]

I live in a 4 bed detached house and now DC are adults it's too big and requires too much maintenance, so that's a good reason to downsize.

However, people often talk of downsizing as a way to fund their retirement or help DC with house purchases of their own. I can't make the maths work.

My house is worth about £500k, a not insignificant sum. It's in The South East but in a cheaper part, in the slightly nicer part of a not that nice town.

This "nice" bit doesn't really have smaller houses, for something smaller it would have to be a bungalow, which would cost about the same, possibly more than my current house.

I could move back to where my first house was, a 3 bed terraced ex council house, but that would cost £350k and after costs would raise maybe £100k (?), a lot of money but not a lot to live on for very long, and a significant reduction in quality of life.

Is this kind of downsizing only for people who live in very expensive areas and who are prepared to move a long way from home? Or am I missing something?

I see. It is good to hear this perspective.

I guess my perspective is having grown up in a city and moved thousands of miles across water for my job and settled in another big city with people coming and going all the time, it did not seem a big deal to do it again in retirement as I am not settled into any community particularly having worked ft.

I may not actually want to retire a long way into a small community or village if I am seen as an outsider.

Wonder what options there are for a retirement village in London.

also a house that doesnt need to much upkeep and maintenance, a newer house for eg.

Thanks for clarifying. I haven't had a chance to have a proper look. That's fine. It's travel in London I want anyway.

I live about 10 minutes from my parents and we moved to this small town when I was at university 38 years ago. I did leave for about 10 years coming back about 27 years ago but I still feel like an outsider. I'm hoping to move when my youngest finishes school. Everyone here seems to be everyone else's cousin, aunt, sibling etc. I definitely want to move to a much larger place (town/city not house).

Because that’s the point of this thread? Or are you just being snobby about flats?

I’d do it for many reasons.

To release cash.

easier upkeep
less expensive to run
buy more centrally
lower bills
no garden
more secure
easier to heat
lower insurance

etc etc.

why would anyone stay in a 4 bed detached house when they get too old to keep on top of the garden and maintenance, can’t keep on top of the cleaning, can’t afford to heat the house on a pension…

I had friends who were snobby when I bought my student flat. They were going to buy a 3 bed detached with a garden, why would you want to live in a flat.

i got the last laugh when I got on the property ladder at 22, and had upsized to a house with garden by 28. While they were still living at home whinging that they couldn’t afford a house and wasn’t I lucky to buy when I did.

Or are you just being snobby about flats?

There's nothing snobby about not wanting to live in a flat. I live in a ground floor maisonette which has its own private garden. There's no way I'd want to give that up and have no outside space, or have to share it. It's only a small garden so it's manageable. I suppose I have the best of both worlds.

You've also got to factor in leasehold, service charges and ground rent, some of which is quite high.

I'm not saying everyone should live in a 4 bed detached, just that many people wouldn't want to live in a flat.

I understand not everyone wants to live in a flat.

i was challenging pp who made the statement “Why would anyone move from a 4 bed detached to a flat?!”

Anyone, as in without exception. Expressing disbelief. Why would anyone lower themselves to a flat after the glory of a 4 bed detached.

flat life suits plenty of people as they get older, and more so than a big unmanageable house. My mum has just moved into a small flat and is coping much better than her house.

i will do it. I lived in flats, 5 bed houses, and a few in between. For ease and convenience a flat is much better.

No not being snobby, I’m not like that at all. I just meant a move from 4 bedroom detached with no joined on neighbours etc, to a flat is rather a big move for someone who is used to being detached. Also the loss of a garden would be unacceptable for most people

But by the time you're old enough for a flat, you probably won't be able to hear the neighbours anyway. 😁

I lived in a flat by myself in my 20s. I wasn't a massive fan. It was lonely, but with the added irritation of hearing the neighbours' rows/ coughing/ toilet.

🤣🤣yes I wouldn’t want to hear that

We’re back to the o/p though. If you want or need to release equity from your house once you don’t need the family sized home any more, you’ll need to compromise.

if your house won’t sell for enough to buy another house, you’ll need to adjust down, possibly to a flat. Ground floor garden flat if you need a garden. If a house is important you’ll need to move somewhere cheaper.

you can’t have everything- the garden you like, the house size, the area. If you don’t want to compromise don’t downsize and live on your pension.

given IHT and house prices now I’ll happily downsize to a flat and live a very comfortable life on the proceeds, rather than stay where I am and scrimp on my pension. A garden isn’t worth it. But that’s me. Like I said ages ago I have a neighbour in a nearly £1m house she can’t afford to maintain, on a pension of about 15k. She doesn’t want to move and would rather live as she does with very little disposable income. That’s up to her.

My first property was a two bedroom, ground floor flat. It was fabulous. Purpose built, my own front door, communal gardens and a gge and parking space. Loved it and would happily do it again if I had towards the end of my life.

Same in my area!!

West country...near Bristol? Allegedly about to get a new form of transport?

I would happily live in a flat/apartment again, especially one with some outside space/terrace. If anything happens to DH, who doesn't feel the same, that would be my choice. But while there's two of us to please, it's all about the compromises,and his version requires a garage, preferably a double garage, and no really close neighbours. We're not downsizing anytime soon.

@TimeForATerf I think the definition "downsizing" is being applied too literally. It doesn't just apply to the square footage. It also applies to downsizing the outgoings: utilities, community charge, cost of maintenance, cost of a gardener or the physical work it entails, etc.

I think you’re right, it doesn’t just mean smaller houses cost less - but it must include all the other cost and hassle of bigger houses: ongoing maintenance, gardens, furnishing it, heating it and even cleaning it.

The first 2, definitely
The transport one, possibly but these things tend to pass me by tbh, as I drive everywhere 😂

This is such a useful thread, it’s given me lots of food for thought as I contemplate my old age. Ideally I don’t want to be stuck with a 4 bed detached to rattle around in, I don’t want to move yet (I’m 62 and still working) but I don’t want to leave it too late. I guess I’ll either stay here in this boring market town where my friends are (I live next to a supermarket, post office, church, cafe and bus stops) and muddle through with the house, move to London (where I’m from) to a flat, or do the retirement village thing. This thread has certainly shown me not to expect any sort of windfall from getting shot of the house, though over time the savings in maintenance should add up.

I don’t think anyone has mentioned the idea of downsizing to a purpose built granny annexe at a DC’s property - does anyone have any experience of this?

Re living in Dc annexe.

there are a lot of pitfalls with this. If the dc already have an annexe, fine, it’s a simple rental or lodger type agreement. You move in, pay them an agreed contribution.

however. If you are selling and contributing to a new, bigger property, or are paying for them to build an annexe, it’s not as straightforward. If you you then need care, it could be a “deprivation of assets” and the LA may include that money in your care contributions. If it’s a gift, yet you benefit from it (as in you are living there) then it’s a gift with reservation. If you don’t survive 7 years after it will be included in your IHT allowance, and your dc may be landed with a tax bill.

then what if you have more than one child. Are you going to give one child money that will significantly increase the value of their property and the others nothing? How will that work? Will the dc have to sell their property on your death to give other dc a share?

don’t do it without legal and financial advice.

I agree with @Whycanineverthinkofone . It is cleaner to buy a downsized property near dcs than to build/contribute to the cost of an annex at the end of their garden.

Inevitably, you'd have to ask which dc (and their partner/spouse) will be prepared to bear the brunt of looking after you and if so, will they get a bigger share of the inheritance. I think this opens up cans of worms to expect care from one out of a few dcs unless it is an only child. If I had the money, I'd prefer a cleaner solution which did not rely on dcs' care by default.

Hrtft but consider that downsizing can also be to find a more suitable property. Location, amenities, maintenance effort, council tax and bills, etc. If you don't get any of those benefits then don't move but all of those can also lead to having more money 'spare' and a higher quality of life.

I love our current house but there's no way that we're staying in it when we're old. We'll find somewhere that is easier to look after and closer to services that will help us stay independent for longer, whether that frees up £10k of capital or £100k. :)

But often these savings are minimal. What makes a difference is being able to manage the property still. Which is why people buy retirement apartments where they do not have the worry of managing that.

Then not the same town...given the spunk fest a new railway line is producing...yeah 100 people per hour being moved by £175 million investment...

I think you’re about 15 minutes from me.