Are you thinking of downsizing?August 7, 2018 8:45 am
According to a survey by Lloyds Bank, 45 per cent of empty nesters have no plans to downsize, despite the potential windfall moving to a smaller place could create.
For these empty nesters then, life seems pretty comfortable, but their new-found wellbeing could be at risk if a study by the London School of Economics (LSE) is anything to go by.
The LSE study is based on findings from people over 50 from 17 European countries taken between 2007 and 2015. It suggests the boomerang population is growing because of the increasing costs of housing and rising job insecurity causing kids to return ‘home’ as adults.
About a quarter of young adults in the UK now live with their parents, and in many cases, will be a source of emotional and practical support for their parents. But it’s clear from the study that some empty nesters view the return of their kids as hampering the exciting new stage of life they had just started to enjoy; creating stress and conflict in the family home and making downsizing seem a more attractive option.
The benefits of downsizing
It could be a more attractive option too when you consider a potential windfall of up to £110,000 for the 55 per cent in Lloyds Bank’s survey who did choose to downsize. This is typically the equity released from moving to a smaller property and something that makes a nice lump sum to top up the pension pot or indulge in a long-dreamed-of holiday of a lifetime.
And if you are thinking of downsizing, you don’t necessarily have to compromise on space. You could find a cheaper property that’s as big as your previous home by:
- Finding a property in a less expensive location
- Avoiding a property in the catchment area of a sought-after school
- Buying a ‘fixer upper’ to work on in retirement
- Looking for property at auction
If your kids have flown the nest and you’re thinking of downsizing, we can explore your options and discuss changes to your financial plan that can help to make more of your new circumstances.