Downsizing is appealing to many people, whether due to retirement, children having flown the nest, or simply enjoying a more minimalist lifestyle.
Homeowners hit by high-interest rates when remortgaging may also be thinking of selling up and moving to a smaller property.
Letting go of your old home can be tough. But a smaller home is usually cheaper and requires much less maintenance than your current property.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
"Homeowners who are due to remortgage are likely facing a higher interest rate, leading to an increase in repayments. But there are still potential savings to be found by exploring remortgage options in advance or considering downsizing your home to save money in the long run,” comments mortgage expert Claire Flynn at the comparison site Confused.com.
“Downsizing can be a challenging and emotional process, but with careful planning and consideration, it can also be an opportunity for positive change.”
But where in the UK could you save the most by downsizing?
Best towns and cities to downsize
Confused.com analysed the price difference between various property sizes to find out how much you would save if you downsized in the UK’s 50 biggest towns and cities. It took the average price of each of the following types of property: studio, one-bedroom, two-bedroom, three-bedroom, four-bedroom and five-bedroom.
It then calculated the percentage difference between each “step” down (for example, two to one-bed, three to two-bed) and averaged the differences for each area.
Towns and cities offering the most significant savings
|Rank||City||Region||Average saving||Average saving (%)|
The coastal town of Bournemouth comes out on top with an average saving of over 60% when downsizing a property. Bournemouth has an ageing population, which could make it a popular destination for those looking to relocate in retirement.
In second place is Sunderland, in the North East, with an average saving of just under 60% for those looking to downsize. Sunderland is among the most affordable areas in the country, especially for smaller properties.
Worst towns and cities to downsize
Towns and cities offering the smallest potential savings
|Rank||City||Region||Average saving*||Average saving (%)|
|1||Kingston upon Hull||Yorkshire & the Humber||£40,124||25.6%|
|2||Milton Keynes||South East||£83,341||26.3%|
|9||York||Yorkshire & the Humber||£98,325||32.8%|
While there’s still a saving to be had in Kingston upon Hull, the average saving is around 26% (compared to 62% in Bournemouth), making it the city with the smallest potential savings.
The city with the second-smallest potential savings is Milton Keynes, at 26.3%. Its proximity to London means that demand for housing is high in Milton Keynes, so prices for smaller homes might not be as affordable as in other places.
What to consider when downsizing
Here are some things to think about when downsizing:
- Assess your needs: Look closely at your current lifestyle and determine what you need and value. Identify what possessions are essential versus what’s simply taking up space.
- Plan ahead: Downsizing requires careful planning and organisation. Create a timeline and checklist to guide you through the process. Consider seeking professional help, such as a moving company, to assist with logistics.
- Consider the space: When downsizing, consider how to optimise your new space efficiently. Look for furniture and storage solutions that are multifunctional and space-saving.
- Explore alternative options: If you’re downsizing for financial reasons, there may be other options. For example, renting one of your rooms in your current home to a lodger.
- Choose your location: If you’ve decided that moving to a smaller property is right for you, do you want to stay in the same area or move somewhere different?
- Discuss with your loved ones: You may want to consider talking it over with close family and friends. For example, if family members regularly stay with you, how will this be managed if you live in a smaller property? If you have friends who recently downsized, do they have any advice?
“Downsizing has several benefits such as reduced mortgage costs, lower maintenance costs and lower utility bills,” comments Flynn. She adds that “thoroughly considering all aspects of downsizing” is always vital though.
Ruth is passionate about helping people feel more confident about their finances. She was previously editor of Times Money Mentor, and prior to that was deputy Money editor at The Sunday Times.
A multi-award winning journalist, Ruth started her career on a pensions magazine at the FT Group, and has also worked at Money Observer and Money Advice Service.
Outside of work, she is a mum to two young children, a magistrate and an NHS volunteer.
Lloyds, Halifax and Bank of Scotland to shut another 45 branches
Lloyds Banking Group, which includes Halifax and Bank of Scotland, is set to close a further 45 branches in 2024 - find out if a branch near you is closing.
By Vaishali Varu Published
US stock trading app Robinhood launches in the UK
The low-cost trading platform has opened another waiting list for British investors - following two failed attempts to launch in this country - and is hoping to be fully operational next year.
By Ruth Emery Published