Published 3 months ago

Why has downsizing been in the news?

Why has downsizing been in the news?

It was Margaret Thatcher in a 1974 party political broadcast that uttered the phrase ‘a nation of homeowners’ and ever since then, subsequent Governments have championed the climbing of the property ladder.  

What, however, happens when we reach the top rung? When we find ourselves rattling around our ‘forever’ home, with our children long gone? When we need to fund our retirement plans? When we’re fed up with dusting, fixing and decorating numerous rooms?  

Interestingly, the word downsizing first entered the Oxford English Dictionary in 1975, meaning to reduce in size. In property terms, we use downsizing to describe the act of moving out of one home into a smaller property.  

There are various reasons to downsize, ranging from releasing equity, becoming mortgage free and reducing the cost of running a home, to finding a more accessible property, moving to be closer to loved ones and cutting back on the burden of maintenance.  

In February this year, a survey of more than 2,000 adults aged 55 or older made headlines in the property press. It found those aged 55-65 were most inclined to downsize (88%), with one in five over-55s considering renting in their retirement.  

The poll, which was conducted by Pegasus, also found 35% of those questioned felt stamp duty (known as Land Transaction Tax in Wales and Land and Buildings Transaction Tax in Scotland) was a barrier to them moving to a smaller home – something that caught the attention of the wider media.   

Before 2024’s Spring Budget, pressure mounted on the Chancellor to introduce a discounted stamp duty rate exclusively for downsizers, with former housing secretary Robert Jenrick a vocal supporter. It was hoped this would encourage homeowners in properties that were too big for their needs to downgrade to smaller dwellings, thus freeing up bigger homes for growing families. The idea was not adopted, however, and the stamp duty thresholds remain the same.   

The public conversation around downsizing continued and has led to two fairly new phrases being coined. ‘Last-time buyer’ has now entered the property lexicon. It’s the counterpart to the first-time buyer, referring to the final property someone buys – usually the result of downsizing.  

There have also been column inches about the image of downsizing. To some, it has a negative connotation – a resignation that life is on the downhill slope and that occupants can no longer cope.  

To make the prospect of downsizing more appealing – and to potentially release homes for younger generations – the phrase ‘right-sizing’ has been born. The concept focuses on having enough space for one’s immediate needs, rather than ploughing on with under-occupancy.  

Need further encouragement to step back down the property ladder? Figures derived from the Office for National Statistics life expectancy data and Zoopla house prices found downsizers in England and Wales could release an average £305,090 by moving from a four bedroom to a two bedroom home.  

If you’d like to know how much equity you could free for travel, leisure and a more comfortable retirement by downsizing, contact us. We can value your current property and suggest alternatives that work with your future plans.

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