"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
Swipe to scroll horizontally
Rank
City
Region
Average saving
Average saving (%)
1
Bournemouth
South West
£222,752
62.2%
2
Sunderland
North East
£67,788
59.9%
3
Warrington
North West
£121,901
58.1%
4
Poole
South West
£231,274
56.2%
5
Dundee
Scotland
£78,154
55.4%
5
Bolton
North West
£100,358
55.4%
7
Aberdeen
Scotland
£90,124
54.9%
8
Middlesbrough
North East
£59,556
53.9%
9
Glasgow
Scotland
£78,637
49.0%
10
Derby
East Midlands
£101,524
48.2%
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
Swipe to scroll horizontally
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%
3
Liverpool
North West
£61,409
29.4%
4
Northampton
East Midlands
£87,779
29.8%
5
Cambridge
East
£124,855
30.5%
6
Edinburgh
Scotland
£87,613
31.1%
7
Luton
East
£110,258
31.2%
8
Belfast
Northern Ireland
£61,632
31.9%
9
York
Yorkshire & the Humber
£98,325
32.8%
10
London
London
£218,573
34.2%
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.
If you’re unsure, consider speaking to a financial adviser and/or a mortgage broker to help you work out the best option for your situation.
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Ruth is an award-winning financial journalist with more than 15 years' experience of working on national newspapers, websites and specialist magazines.
She 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, while also serving as a magistrate and an NHS volunteer.
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