Downsize now or wait?

[Curlingstone]

An opportunity has come up to downsize sooner than planned. Mid 50s LP and hoping to semi retire next year . No money from DCs Dad

Current house has £100k mortgage ( until I'm 73!!)
Would clear mortgage by moving.

Will get modest work pension with a lump sum (will forfeit some by claiming early but NHS and knackered. Have reduced hours but done my time & want out). Looking at what I'd like to do in future, likely self employed small business.

Pension lump sum would clear around 70% of mortgage ( hopefully, waiting for final figures).

Current house v desirable area etc gained value ++

Dilemma is new house still v desirable location but far less pretty/not period. So won't rise in value to same extent as current house. But perfect location for us.

And I'd have the lump sum to invest. While nice problem to have, I worry I'm cashing in too early. I'll never have this money again.

However I'd love no mortgage & more fun money before DC goes to Uni (3 yrs).

Other option is wait. Consider switch to interest only mortgage in 2 yrs when current deal expires. Use lump sum to boost lifestyle for next 3 yrs (& invest a lot of it) & move later. Would miss the house that's come up - which is PERFECT location.

Any thoughts wise women of Mumsnet? Thanks

There's no right answer here, I think - just balancing preferences and risks.

A few things to consider -pros and cons
1.I would caution that a house should not be viewed primarily as an investment, but as a home to live in. Once bought and moved into, it produces no dividend or income unless you plan to sell it or utilise equity release. Putting yourself in this mindset - which property would suit you best for your lifestyle and future plans?
Would there be sufficient space for DC in new property?

2.Waiting to move home until DC's have left for Uni - It's possible that the house you move to will no longer feel like the 'family home' for them. No shared memories there. Consider if this is something that is important to you - and them.

3.Unless it is something you particularly enjoy doing, the upheaval of a move becomes more cumbersome and daunting as you get older.

4.Although a £100K mortgage sounds quite hefty for your age, inflation is good news for debtors, as the inflation reduces the value of the debt over time, particularly if you have a low fixed rate. However, there is nothing quite like the feeling of security in knowing you own your property outright.

5.House price movements are somewhat of an unknown, but there are warnings of a predicted fall - so the financial benefit of holding onto your current house may well reduce over time.

In summary - what is your attitude to risk?
If you like to play safe and have some certainty, then consider a move now - you know what you'll be getting and you know the figures. If you'd rather take a punt on house prices rising over time then stay put and cross your fingers.

One more thing - I don't know if you recall the house price crash late 1980's, early 1990's but one of the issues then was not just falling prices and negative equity, but also there was actually very little decent housing stock on the market to buy at all. Everybody that could afford to stayed put. So it's not inconceivable that in a worse case scenario that might happen again.

@seekingasimplelife gosh what a helpful reply, thanks.
The potential house is on the same street - hence the appeal! Houses don't come up often and are highly sought after. A crash and no choice is a real possibility.
Your first point I think is what I need to focus on - what do I actually want, now and in the future. What suits my life plans, attitude to risk etc.
Plenty to ponder over - seeing it set out like this really helps, thanks

I'm glad it was helpful. Your situation sounds very similar to mine a few years ago.

I know you haven't asked about pensions specifically, but this phrase jumped out at me in your original post: 'I worry I'm cashing in too early. I'll never have this money again'.

I can relate to this dilemma!

A few things I found, having taken the leap myself...
-Although taking a DB pension early did reduce the amount, it is nevertheless index linked for life (which salary was not); This provides tremendous security and peace of mind, despite it being a very modest income.

-Outgoings reduced considerably once taking early retirement, much more than I expected, even taking into account DC living at home.

-I also had tentative plans to start a small self-employed business, and perhaps return to my original job on an ad-hoc basis if need be, to build up further pension income once retired. I happily relinquished the idea once I found I didn't need the additional income.

-Several years down the line I haven't actually needed to use of the lump sum, although the initial plan was to supplement income with it until State retirement age.

One of the curious truths about money I am continually confounded by, is that one's level of income (above a basic minimum) bears very little correlation to one's sense of financial prosperity, or otherwise. It's all down to how one manages financial resources.

I guess it depends on how likely something like the new property would come up again?

@seekingasimplelife again thanks - great to hear from someone who's come out the other side. Funny isn't it about money. I can't see how work is costing me much atm - low transport costs, take my own lunch etc & how retiring will be cheaper. I need to trust what people say- it is just cheaper/ I will manage money better! I agree totally with your comments re prosperity & managing resources.
@Ablababla thanks, this is a one & only opportunity in many ways, which has arisen unexpectedly/ prompted some decision making earlier than planned. But there will always be options in the future, just not this one. I'm ok with that idea.

Would miss the house that's come up - which is PERFECT location.

You know you want to downsize sooner or later. A perfect opportunity has come up. I’d go with sooner.

I cant help with the financial pros and cons of the pension..

But there is always another house. In my 3 goes at buying and selling, i have 'lost' so many perfect houses and something else has always come up that was perfect in a different way because 2 years down the line my idea of perfect changed.

I think if house prices are going down, which it seems like they are, then it's a good time to downsize (and a bad time to upsize)

What about playing the game of the worst case scenario? Eg, you can no longer work due to illness and house prices crash, whilst cost rise/benefits drop and all you have is savings and you need a new roof etc. - would you regret not having downsized now and taken the nhs pension sum?

@sorry this is an old post!

Curlingstone what did you end up doing?
I'm similar- mid 40s and public services. I can go in 6 years ish. I'm knackered.

Downsizing won't remove our mortgage but it will make it far easier.

@Baxdream funny seeing this post & how life ticks along. Gave up work & stayed put. Very happy with both decisions. Pension better than anticipated and have taken some chunks off the mortgage. Probably won't downsize for 5- 10 yrs . Love my house and garden and want the stability for DC while still at home (& for them to have 'home' when go off to Uni). Paying off the mortgage will happen when I downsize. Life is good atm. I was so utterly spent working in the NHS.

That's lovely to hear! I'm pleased things have worked out for you.
It's a difficult decision isn't it. I've worked so hard at my career and really just need to power through these next few years.
Downsizing will free up a lot of cash - mortgage, bills etc. it would mean our annual leave can be utilising fully for holidays that really help get you through what is a difficult career at times.