There is a North / South divide in those expected to downsize in the near future, with one in ten (10%) of those in the North contemplating this, compared to 14% of those in the South. In London, this figure is 25%, likely due to housing prices and cost of living increases.
The building society says it believes that current house prices and mortgage rates, as well as increased living costs, are contributing to this trend - with UK homes costing an average of 8.5 times the average earnings, many may be considering downsizing not only to free up money for themselves, but also to help younger family members get on the property ladder.
Charlotte Grimshaw, head of intermediaries at Suffolk Building Society said:
“Not every downsizer needs a mortgage, but an increasing number do, due to the rising cost of living and current property prices. For some, it’s a repayment vehicle for an existing interest only mortgage that’s come to the end of its term. Therefore, it’s an important conversation for brokers to be having with their clients.
“Encouraging homeowners to think about downsizing earlier rather than later means they’re well prepared to move at a time that suits them – or enjoy the cash they may free up from it. Being aware of all options of homeownership, including downsizing, means that people can make informed decisions in a timely manner and consider just what the right option for them looks like.
“Downsizing could also help to free up some of the UK’s housing stock and create momentum in the market for buyers, with larger houses becoming available for growing families. Over time, this may make it easier for more people to get onto the property ladder, as housing stock becomes available at the lower end. It could also benefit those further up who may be feeling the financial squeeze from the cost of living or looking to support their grown-up children.
“In setting out targets for new home construction, the government clearly acknowledges the UK's housing crisis. Certainly, more homes are needed to meet demand. But we’d also welcome some shorter-term policies, such as encouraging downsizing, to get the housing market moving across existing housing stock, while the building sector gears up to meet the challenge."
