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?

Yes. However you are immediately devaluing the property by doing so. Then, depending on the layout of the upstairs, you might just end up with some very oddly shaped rooms and anyway,none of that would increase the amount of downstairs living space.

I think the reductions in bills makes a big difference too.

I downsized twice as my children left home, each time splitting the difference between me and them. In each case I moved either to a smaller house or a cheaper location. It’s been very useful for them.

I think if relocating you need to do it when you can get out and about easily still to make contacts. MIL is now wanting to relocate, I suggested it when she had some financial issues at 70, she is now 83. She has left it too late really.

The other point with a major relocation is how easily you can make new contacts if very shy then nipping along to U3a or a hobby group may seem very scary. That’s one thing that’s very personal to the individual. Plus even if in a couple unless some awful accident one of them will end up alone.

How? We are an aging population and there will be more older people wanting suitable properties. It would cost peanuts to reinstate a stud wall.

Wouldn't work for me either as my house is the ex-council house you've already rejected, pretty much the cheapest housing.

Just got curious, as I keep seeing ads for luxury retirement villages. Without giving figures, we can sell our Surrey home, buy a luxury 3bed/2-3bath apartment for 1/4 to 1/3 of what we would sell our home for. If we divided the remaining capital 3 ways, it would allow each of our children to buy a modest first property each, or get a really good mortgage rate by putting down a 50% deposit and still leave us with the same amount again to fritter away on cruises whilst living on our pensions. My DH would fucking hate it, but a quick look on google and I see there are lots of options.

So, it all comes down to the value of the house you own and where and how you (or your children if passing it on) want to live. In our case, it would be selfish to sit on it all when we could get the kids off to a flying start property-wise and still enjoy retirement without being a burden on them.

I read somewhere or heard it on a vlog don't get too many bedrooms for people coming to stay a few times a year. An extra bedroom in the Southeast can cost £50k. This really made sense to me and has changed my way of thinking. If people are coming to stay 4 times a year they can get an AirBnB or stay in a hotel or just have one spare bedroom and the others sleep on a fold-down couch. There's no way now I've realised that, that'll I'll buy more bedrooms than my personal needs. I've got 3 bedrooms currently. I've reached an age where I don't want friends staying and my son even said get a one-bed flat and he'll sleep on the couch in the living room when he stays over the odd night. Makes more sense to me and frees up more money when downsizing. Friends can stay in a B&B or you meet halfway for the day.

Is this over the hellmouth or something? Why would you have people below you in a ground floor flat? Yes I know there a basements but generally “basement” = ground floor as these are usually the ones with garden access.

i’ve lived in flats. Usually top floor or middle floor. They’re no more antisocial than terraced houses. I prefer top floor myself as I like the safety of not have ground floor accessible windows and doors.

it cost me way less in service charges than maintaining a house and garden. My buildings insurance to start is £350 a year. Then factor in someone does the garden and all the maintenance, repaints communal areas, replaces light bulbs- this year so far I’ve had two tiles replaced from wind damage, I need to get someone in to cut back the ivy taking over, the rotten decking needed replaced last year- I do pay for a gardener as I hate it, but I also need someone in to redo the front this year as well. I had new windows the other year costing a fair bit.

dh is reluctant but I’d move into a city centre flat no issues. No maintenance except my own decor, only contents insurance. Tend to be warm as well so heating costs saved. I also like the security of the communal entrance as well as my “front” door. Yes I have pets but once these go I won’t get more as I plan on lots of holidays. I will borrow!

This is all correct, but you've got to have that vision and drive to divide rooms back up, and as @Porcuporpoise states, knocking them through to start with can upset the balance of floorspace and room layout...I knew someone who knocked out stud walls to lose a bedroom and gain a bigger lounge...He ended up with a very odd shaped lounge, and the remaining bedroom only just about accommodated a double bed (and even that was a squeeze).

When it came to selling, he sold it as a one-bed flat, knowing it was worth more as a 2-bed, but the prospect of getting the walls put back was more than he could face...I've since seen the photos of said flat on Rightmove as it was soon sold again...sold as a two bed flat, as whoever bought it must have seen the value in doing the work to put the second bedroom back in.

It can be done, but it's not on everyone's list when moving house.

It has to be said that a retirement home is in a league of its own though...there are all sorts of rules about the buying and selling back of them, and then there are the service charges which go way beyond that of a normal flat...but this said, I know several people who live in these homes and to say they are living their best lives is an understatement.

I've never heard / considered this.

That's not just downsizing, that's completely starting again if you have to move area.

OP, sometimes the maths just dont work. It's not an option for everyone.

If moving costs make up a big % of your sale price, it's rarely going to work. And yes, the new house does need to be cheaper.

I am assuming the service charge would be around £1000 per month so that’s something to factor in.

@Whycanineverthinkofone All our city centre flats are full of students. I do not fancy being surrounded by students. And there is no parking, so no car when simply walking is a harder choice and not always possible.

Well it all depends on your take on the word "downsizing"...AFAIK it's not a legal term, with a specific framework, nor is it a specific thing like an iron or a car is...my understanding of it is that it's a general term that's used as a catch-all for when someone (usually later in life) is buying somewhere smaller...their reasons for doing it, and the financial implications will be personal to them. I knew one lady who "downsized" to a flat because after her husband died she was convinced the roof was going to blow off the house during the night, and nothing would convince her that it probably wouldn't. I didn't know her well enough to dig deeper, and I suspect there were many other reasons for her wanting to move, but that was the line she trotted out as her reason for moving.

I'm in Scandinavia, and many (most?) apartment buildings here have a dedicated guest room or apartment that owners/residents can book for a small cost (something like £25/night) when you have visitors. Of course it's not perfect as there might be specific times of year that are very popular, but it is an efficient use of space and it also means that while your guests are nearby, they are not in your face 24/7.

They often do that in retirement villages here in the UK, but it's very unusual in purpose built flats...I do some work in various communal areas of flats, plus I have lived in and visited people in many more, and no matter what age of the building, it's incredibly rare for any of them to have a cleaners cupboard, let alone a sink & toilet. A guest room would be on another level altogether.

Retirement apartments are terrible value for money, but sell because they meet older peoples needs. Modern with little maintenance, window cleaning included in service charge, communal garden and lounge with maintenance costs included in service charge.
As people get older the individual approach does not work well. Because most can not manage to sort everything out by themselves.
They are throwing them up in the City I live in and I know two people who have bought one.

I'd say the term "terrible value for money" is subjective...I could think that now, at an age where I can still do everything for myself, but the people I know who live in such places think it's like living in a hotel...I suppose it's because they have enough money to spend on living there, and not enough time to spend it on other things, especially if going on holiday is now a thing of the past. I recently visited an ex-neighbour in her new retirement home and it was like walking through a hotel. I couldn't fault it.

@beenonthebox I am curious about your last sentence that people in retirement homes are living their best lives. Is it possible to elaborate why, how old they are and which retirement homes?

That sounds great! What a good idea.

Well I'm not about to give names of buildings...they are all aged over 80, have health conditions that limit their daily activities, and now live in immaculate apartments in well-maintained buildings, with like-minded people, have shops, cafes, hairdressers, libraries, communal lounge, sports facilities, plus more, all on-site, the only maintenance they have to worry about is decorating and carpeting, wheelchairs and mobility scooters can easily be taken in & out of the lifts, up & down corridors, and straight into their apartment...you pay for it, but then if you can afford it, it's wonderful. It's also incredibly secure, and well staffed. The people I know who live in them think it's wonderful after all the years they spent working.

I'm in a 6 bedroom house with a DH and 2 teens. It's clearly too big for us now and I'd like to downsize to a 4 bed. DH point blank refuses to move and we don't disagree often but we do on this issue. He doesn't want to give up our large garden or garage. Smaller houses tend to come with smaller gardens. We could gain £100k and have less cleaning and maintenance too. I'm worried if we leave it too long he'll never agree to downsize and then we'll be too old to do it.

I'm hoping to downsize from a 3-bed house within the next year to a 1 or 2-bed, probably a flat if I can find one that I think will be quiet enough.

Ideally I'd like a small block of flats that is for over 55s or over 60s only, minimising noise - no communal area needed, but I'm not ready to buy a retirement flat with a communal area as the service charges are more than I want to pay right now. I'd like to continue as independently as I can for as long as possible. What I want seems to be hard to find though.

I'm in Surrey. While only 30 minutes into London I want to move back into London to take advantage of free transport when I get to 60, things to do that I like doing and being a bit closer to family and friends. I'm not too bothered about how much equity this will release, a little bit would be great.