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 I can see that. My point is to look at the pros and cons dispassionately. Consider the costs of moving along with any financial benefits and also consider the challenges in moving from your current surroundings.

I think it is a great idea. I've looked into one in Weybridge but service charges too much for me.

Another I looked at in Byfleet. The flat was lovely and cheap! The service charge was a bit steep though. However, I thought if I live another 25 years with the cheaper flat even though the service charge was more than I wanted to pay it was still cheaper than a house over this period, IF the service charge didn't jump up massively.

We looked at that but the stairwell is between the rooms plus 2 en suites! if they made it one big room rather than this set up it would have made a fabulous first floor living room, I just don’t understand architects thought process, they never seem to think who is the target market, or who would actually want to buy theses houses, they just seem to think the more bedrooms the better and therefore, in their minds can hike the price up because they are 4 bedrooms rather than two, even though it’s the same square footage. I expect they will end up as holiday homes or Air B&B, just what we need……🙄.

An example from me. Friends father, lost his wife, carried on living in their retirement bungalow but struggled to keep it up, got increasingly lonely and isolated, esp when the bus service to town was cut (he no longer drives). My friend convinced him to move to a retirement community round the corner from her. He has his own flat, no maintenance responsibilities. There's a cafe/restaurant on site so if he doesn't fancy cooking (he ever cooked much) he can just potter on down and buy a meal relatively cheaply. There's a rec room where there's a weekly programme of activities/exercise classes that he can sign up for and they run day trips into town or (in summer) to the coast or countryside too (these cost extra). Best of all he's surrounded by people his own age all looking for people to talk to and things to do (I guess if you're happiest in your own company you'd not chose this sort of development). He's busy, happy and friend says its like he's de-aged 10 years. Before he'd be constantly asking her to visit, now she has to fit into his busy schedule. Says he wishes he'd moved there years ago.

@beenonthebox thanks for elaborating. That makes sense if they are over 80 with health conditions. It sounds like a good solution for independent living (if you can afford it) for elderly people who would otherwise struggle on their own. In that situation, whilst the monthly service charge will no doubt be high, I assume it is still considerably cheaper than a care home and gives peace of mind to the dc that their parents have the support where they live.

BTW I was not expecting the exact name of buildings. I have heard of McCarthy Stone (good and bad) so wondering whether it is that developer.

Ah right, ISWYM re:building name. Thinking about it, there are different types of retirement homes in terms of what facilities they offer...I was thinking of people I know who live in these "villages" as they call them (you'd be forgiven for thinking you'd never need to set foot out of the place, given what they offer), but I've known people in similar apartments which fewer facilities...a salon facility and a communal dining room & lounge seems pretty standard, as a rough guide.

@Porcuporpoise thanks for sharing that. Sounds like the retirement community has been a good solution for him especially after the grief of the loss of his wife. Must be such a relief for your friend.

@beenonthebox that is good to know. I am getting my head around retirement living options. I suppose retirement villages and assisted living will come with high monthly charges, but it will just have to be factored into the retirement finances step down plan for downsizing. Not to go in too early in retirement whilst still active but an option when independent living becomes more challenging with advancing age.

These are not for someone who needs care. You still have to pay for carers to come on, just as you would in an ordinary house. They are for people for whom managing a property is too much, and want company

The people I know living in retirement apartments are not in ultra posh ones. They are nice, but they do not have loads of money. They just can not cope with the maintenance of a family house.

My grandmother downsized some years after she was widowed, from a large 4 bed detached with a huge garden, utility room add on, etc, to a 3 bed bunglow with a much smaller garden which was a few streets away. The floor area was about half, I think. After moving costs, it didn't net her a massive amount of cash, but she saved a lot on the bills, didn't have stairs, and a decade later in her mid to late 80s could carry on living at home when she might otherwise have struggled. So it wasn't all about the actual cash, also running costs and long-term suitability.

@LondonLawyer in most places now a 3 bedroom bungalow would cost more to buy than the house.

Surely that depends on the house.

Potentially, but where I live detached bungalows can go for a considerable sum of money, and are often given a 2nd floor extension, or are pulled down to build a five or six bed house. It's the land they consume which is often the important part.

Exactly it is the land. Where I am 3 bedroom bungalows are turned into houses or even a small apartment block. Only small bungalows stay as bungalows.

It still depends on the house though and on the bungalow.

Where I live a large 4 bed with huge garden would be 1.2 to 1.5m. A small 3 bed bungalow would be £700k to £800k, a cracker £950k. Where my mum lives the same 4 bed would be £650-£700k. A 3 bed bungalow £450 to £550k.

Ah well you see, I don't live anywhere where prices are as high as that.

That only works where prices are so high. In most places people can get more money by selling a 3 bedroom bungalow converted into a 5 bedroom house or 4 - 6 small flats.

On the back of this - and purely as a matter of interest - I've just done a search of detached bungalows for sale in my area, and I am astounded at the asking prices, as well as how much land they occupy. We're talking £500K for a bungalow vs £350 - £400K for a detached house with same number of bedrooms.

It goes without saying that there's a huge number of variables in this equation, but even the semi-detached bungalows are more than the equivalent houses.

Bungalows have always been more expensive than the equivalent houses. The compromise is a flat.

Also downsizing means reducing bedrooms. Six to three; Four to two, etc.

it can seem ludicrous. We looked at a 4 bed bungalow for £1.25 and whilst perfectly done there was no utility room.

But apart from those expensive retirement flats, flats outside of places like London are full of students and/or young people. They are for young people who will be playing music loudly until 10pm, not elderly people in bed by 8pm.
More importantly, you have nowhere to keep a mobility scooter.

Not in the Home Counties where my mother lives.

You seem to have missed my point - I didn't give any advice at all just pointed out that it is a WANT not a NEED to remain within a given community. If people NEED to free up cash to afford to live they can move somewhere cheaper. OP was saying she doesn't understand how it works - and moving to a different location is exactly how it works for a lot of people.

@EatingHealthy I think it is a need.