A new take on downsizing

A new take on downsizing

The term “downsizing” suggests moving to a property which is physically smaller than the one you currently own, reflecting the fact that you no longer need the space of a family home with room for children.  

These days, however, the reality of retirement can be a little different.  High house prices can see adult children stay in the family home for far longer or perhaps see it as a useful bolthole where they can stay when they need to.  Alternatively, you may want space for family to come and stay with you sometimes, to work from home or to take a hobby more seriously.  Therefore, it may be worthwhile to stretch the term downsizing somewhat and to think of it more in terms of finance than in terms of space. In other words, you are downsizing the cost of your home and perhaps your overall cost of living rather than downsizing your space.  Here are three ideas for doing that.

Move to a less expensive location, even within your local area

Moving to a less expensive location does not have to mean compromising on safety or core amenities, it just means understanding what Family homes, pretty much by definition, are bought by people with children and children need to be educated, which means that homes in the catchment area for good schools can carry a price premium over those which are not.  If you are no longer concerned about sending a child to school, it can therefore make a lot of financial sense to avoid these areas.  Similarly, working adults may be drawn to areas with good commuter links and, again, if you have no need of these, then you may find your budget goes further if you look outside them.

Buy a property in need of renovation (or even just land)

On the one hand, you do need to be very clear about the fact that property renovation is a major undertaking (assuming you’re doing more than just cosmetic upgrades).  On the other hand, it can be massively rewarding and when you are retired you will have the benefit of not having to go to work (at least not to a 9-to-5 job) so you will be saved the trial of juggling your paid employment with your renovation project.  Obviously, if you are going to take on a property for renovation, you are going to have to remember that the actual purchase price is only going to be a part of the overall cost of taking on the property.  In fact, depending on how much of a renovation it requires, the purchase price may actually be a minor component of how much money you end up spending.

Buying at auction

There are two issues with buying at auction.  The first is that auctions typically work on a “what you see is what you get” basis, and the other is that auctions generally require immediate payment, which makes it extremely difficult to get a mortgage.  There is also the fact that some people may find that auctions bring out their competitive streak and that they have an emotional objection to being outbid, which causes them to bid higher than they should.  On the other hand, auction sales are a very time-efficient method of buying a house in that you know immediately whether or not your offer (bid) has been accepted and once the hammer comes down, everything is final, you are not going to be gazumped or simply have a seller change their mind. In short, auction sales are not for everybody and, as always, you would be strongly recommended to do your homework before bidding on a property, but they can be good places to hunt for property bargains.

If you have any questions please contact your local Charles Derby Financial Adviser today on 0800 849 1279 or email This email address is being protected from spambots. You need JavaScript enabled to view it.