Downsizing – also known as “right-sizing” – can usher in a raft of exciting new freedoms. Whether you’re starting another chapter in life, looking to remove the high costs of keeping a larger property, simplifying your daily routine or taking a leap into the unknown, right-sizing can be a welcome change. It might mean moving to the heart of a buzzy city – not necessarily into a smaller home, just a different one – with more opportunities for entertainment and socialising. It will also help to free up family housing stock: those over 60 account for more than half of all owner-occupier housing wealth across the UK, while those over 75 hold almost a quarter.
Looming tax changes might also incentivise homeowners to think about downsizing over the next five years: from 2027, private pensions will be included in the value of an estate for inheritance tax (IHT) purposes, while the freezing of the nil rate band for IHT until 2030 will mean that more estates are subject to the levy. “Downsizing can also be an avenue to support children and grandchildren on the housing ladder,” says Nick Maud, director of residential research at Savills. So where might the new breed of downsizers opt to live?
Whether the priority is staying close to friends and family or improved access to shops, restaurants and entertainment, downsizers are keen not to drift too far from the excitement of urban life, says Maud. And while many will stay relatively local, others might follow their grandchildren – particularly if they’re helping with increasing school fees.
