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?

Well that depends on what you spend maintaining your house, we spend no where near that amount!

Usually by the time you come to retire you have a small mortgage and your home has increased in value leaving equity. You sell your house, pay off the small mortgage if you still have one and use the difference to purchase a cheaper house mortgage free..keeping what is left to live off. Generally that's how it works but obviously I'm not everyone is in that situation near retirement

Interesting. I can easily spend an average of £1000 a year on maintaining the outside of my home.

@Newmumburnout OP is simply saying that by the time you take in the costs of moving, if you stay in the same area it does not free up as much as OP thought it would.

Wow!!

Indeed. I know a great many people who were mortgage free by their mid 50s, but of course it's all relative based on how much someone was prepared to borrow vs. how long they wanted to spend paying it off (if indeed pay it off).

@beenonthebox , bit of a blinkered view. I divorced in my 40s and took out a huge mortgage. Had I not divorced I’d have been mortgage free by 50.

In what way blinkered?

The idea is you sell your larger detached home for a smaller home further afield. Perhaps if you can't afford a bungalow you could look at a ground floor flat?

My parents “downsized” by buying a bigger house in a cheaper area. It helped that us kids had moved away because it was too expensive at home and they wanted to be nearer to us. So they sold their 4 bed detached house in one area for £850k and bought another, bigger one, for £500k. Happy days all round

Moving further afield from those you know is daft

I saw one of those property programmes on afternoon TV recently and the couple on it were downsizing but finding problems with all the houses shown. The presenter said the problem is that people buying first homes will often compromise more than downsizers.

He said when people downsize they want to keep the positives of larger homes like good size kitchens and reception room that are practical for entertaining, visitors, etc but want fewer bedrooms, smaller garden, etc whereas builders make lower priced homes smaller all round.

DH and I are in a large family home and not downsizing yet as family often visit/stay but will probably have to move to a smaller, more modern detached as bungalows are expensive here and many have been "modernised" by extending into the roof

Seriously, why would you want to sell your detached property to buy one where you could have noisy or antisocial neighbours above you, below you and on each side?

Swapping a paid off mortgage for a rental has got to be a bad idea. The rent would cost more than you'd get from any investment

My parents managed to downsize from a big 4 bed house with rambling garden to a smaller modern 4 bed house. It has much smaller bedrooms, but still the large downstairs rooms. More manageable garden but not small. The only downside was it cost exactly the same as their old house sold for!

He said when people downsize they want to keep the positives of larger homes like good size kitchens and reception room that are practical for entertaining, visitors, etc but want fewer bedrooms, smaller garden, etc whereas builders make lower priced homes smaller all round.

Agree with this, I’ve seen a row of newly built houses that could have been perfect if the architect and builders had designed them the correct way, close to town small front courtyard and balconies, so not suitable as a family home, as no garden and only one parking space, they have built them with 4 bedrooms and one small open plan living space on the ground floor, no utility room or storage, they don’t appeal to retirees because too many bedrooms compared to the living space and they don’t appeal to families because of the one open plan living space and no garden, they have been reduced by £100k and still can’t shift them, if they had been built with the same footprint but only 2 bedrooms I bet they would have all sold to downsizers, builders really are missing a lucrative trick, build houses with less bedrooms and more living space.

Seriously, as you get older and more housebound having a lot of "life" happening outside your window is not a bad thing. My auntie moved from her rural idyl to a flat overlooking a primary school near the town centre. She was able to make it to the shop, hairdresser and local cafe independently long after she gave up driving, her hearing loss meant that the everyday noise from neighbours didn't really bother her and, when she couldn't really get out independently any more, she got a lot of entertainment watching the people on the street.

True, but you pays your money, you takes your chance...I had anti-social neighbours who lived on the next road whose garden was at a right angle to mine, and they were the worst neighbours I'd ever, ever had. I ended up moving house because of the effect they were having on me and my fellow neighbours. Being detached from neighbours is absolutely no guarantee of having no problems with them.

People buy those retirement flats because although they are a bad financial deal, the housing stock does not really exist for older people downsizing.

It amounts to putting aside £20 a week. I don't always spend £1000 a year, but that's what I budget for. I can't just sit around waiting for a big repair to pay for itself.

You said for the outside of your property. If you meant your whole house I would agree

Yes, there is a big issue with retirees in Devon/Cornwall and the IoW moving 4-6hrs from family and finding themselves struggling when age related illness makes them less mobile/unable to drive and more dependent upon the NHS… when they have no local relatives to support them with hospital appointments because they downsized and spent their cash on cruises etc. Think there was an article in one of the Torygraph last year about a couple selling up their Devon pile to move back to London so that there were closer to amenities and their sons.

Well, I used to have a gardener - that was about £40 a month for several months a year, and I'm going back several years. I've just paid £800 to get some rendering cladded in UPVC and get the gutters cleaned at the same time. If I had gone-in for rendering, that would have been a small fortune. The roof is going to need major repair at some point, for which my share of it (I live in a maisonette, so cost is split, but then roof is bigger than a house) is likely to be at least £3K, based on what other neighbours have paid for theirs. And on it goes.

Is it not possible to knock two beds into 1?

People downsizing usually are not up for such big work