Trading down from a detached house to a bungalow or a semi-detached house could raise a significant amount of cash, according to the latest Downsizers Report from Lloyds Bank.
Those moving to a bungalow can apparently free up £103,715 on average, with those moving to a semi-detached house standing to raise even more money, up to £121,686.
Downsizing continues to be the key driver of property moves, says Lloyds, with over half (52%) of homeowners planning to sell their property in the next three years saying they’d like to move to a smaller house.
Three in four expect to make money when they downsize. Of those, two in five (43%) will reinvest this money in a new property, a quarter (26%) will invest in other financial products and over one in ten will invest in their pension (13%) or give to their family members (13%). Just over a quarter are (26%) are planning to move to a more affordable area, 5% less than in 2013.
Almost two thirds (63%) said one of the main reasons for downsizing is to find a smaller property that better suits their current circumstances.
After this, the key drivers for downsizing are largely financial, with two in five (40%) looking to downsize to help reduce bills and outgoings. Around 28% of downsizers are also looking to release equity from their property, and a quarter (25%) are looking to help support their retirement plans.
“Downsizing is clearly still a major part of the housing market with over half of potential homemovers considering a smaller property,” commented Andy Hulme, Mortgages Director at Lloyds Bank. “The volume of downsizers is therefore helping to keep the market moving, freeing up larger properties for those making their way up the ladder.”
“Once people do look to trade down, the benefits are clear,” he added. “Downsizing can generate significant amounts of money, on average over £100,000 in 2014. It also helps to lower the cost of household bills and frees up funds so that people can enjoy their retirement or invest their money for the future.”
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