Downsizing. Daft question, maybe, but how does it work?

[Threedaysaweek2019]

It’s one of those ‘should we stay or should we go’ conversations between dh and I about future plans and options.

We have no debts, mortgage paid off.
We have a bit of an idea of how downsizing works, moving to a house that has less value than the house we live in so we’ll be better off, but to know more will give us a more informed decision.
Thank you in advance.

To me it’s more about a smaller home that’s easier to keep.
Its no different to buying and selling

Will you make enough profit based on moving costs

Do you want to move areas and be nearer family or the coast

What will you do with the proceeds? Look at investments

So say your kids have moved out of your four bed home and you have a large garden which you are finding increasingly hard to maintain. You also want to move closer to your kids/city/sea whatever. So you sell your house and buy a smaller one - it doesn’t necessarily mean cheaper if you are moving to a more pricey area (say back to London or with a sea view). Or you are wanting a bit of money to go travelling/help the kids/ save for future care expenses whatever, so you set yourself a smaller budget and look accordingly.
The practicalities are the same, other than you will have to sell/give away/dispose of extra furniture.

Thank you for replying.
As far as proceeds go, the profit we make by downsizing will go towards our retirement.
We have pensions and some savings, but that bit extra could mean retiring a little earlier than planned, or being a little more comfortable iyswim.

Being honest, my first thought was that it is a bit of a daft question, but thinking about it a little more, there are a lot of different issues and priorities to balance.

Financial - are you looking for a cheaper property giving you cash in hand? Or do you want to use all the proceeds from existing property to buy a smaller property in more expensive area, higher spec house, etc?

Practical - if you’re looking to your old age - look at property on one level, close to public transport, shops, etc.

Emotional - what furniture/possessions do you really want to keep and will need space for? What do you love/ hate about your current house - downsizing could mean no need to compromise so you can have a house which has everything you love.

Family - realistically, will you need space for visitors? Can that space be multi-purpose so not lying empty and unused when you don’t have guests?

Hmmm. Lots to think about!

Sounds like you’re in a good position to make some dreams become reality.

It’s a good idea and frees up housing stock for a family. It also means you have less to maintain. If you think this may be your last move do a lot of research if you are moving to another area - moving is expensive and you don’t want to regret it. I’d be wary of moving to a remote area for example as you will need access to services and maybe public transport, hospital etc eventually. Also consider how you would make friends in a new area - is there a bridge club, gym, art classes whatever you are into that will make you still feel an active member of the community when you retire. Volunteering is always worthwhile.

Also worth looking at Eco homes where they have installed solar panels etc so bills are reduced

DNan lives is a complex where everyone has dinner dancing plays cards days out people on tap for emergencies etc

Something like that might be ideal

It would be good also to move somewhere within walking distance of amenities.

So, silly question, but how does the difference in value of both properties from higher to lower come to us?
Say our house is worth £200k and the property we are buying is worth £150k as an example, how do we claim the £50k difference?
Does a solicitor sort that part out, and transfer that to our bank account?
We had a mortgage when we moved last, so we’re not well up on moving without a mortgage being involved.

When you sell, the Buyer pays your Solicitor for the Property.

Your Solicitor then pays off anything you still owe on the Mortgage, your Estate Agent fees, his legal fees and any other debts attached to the property.

He pays the remaining balance into your bank account.

They will just pay you on the day of completion .. we downsized my mum and she loved getting a new house and a few 100 thousand pounds in her bank account . ✅✅

Sorry, should add he (your Solicitor) also pays for the property you are purchasing, along with Stamp Duty, legal fees etc.

Sounds ideal, I might join your DNan @GreenTulips 😂.
Yes, eco homes are a good option. One level would be a good option also.

Well exactly @Pipandmum our house is big enough for a family.

We didn’t have children and our families live in the same town, so nobody else gets affected by us downsizing and we don’t plan to move out of the area.

We live in a part of town where house prices are at a premium, so if we downsized to a different part of town, we could get a house that’s not too much smaller size than ours, but cheaper, so furniture won’t be an issue, or any friends staying over.
Hope all that made sense...

Thank you @Flyingsouthwiththeswallows, that’s the info we needed.
@gubbsywubbsy, thanks for that as well.

It’s all much clearer now.