Downsize to release funds for retirement

Beeblebr0x

I'd avoid equity release like the plague. You can be sure the company will benefit handsomely at your expense.

stuart746

We currently live in an expensive area and have a large detached house. We like our home but may downsize in value (and potentially size) to a different area of the region and so freeing up some equity to help children with house deposits etc. Much depends on how much longer we continue to work.

Shimrod

gorgeousme said:

Just wondering, who has or has planned to downsize to fund retirement?

I've done the opposite - put money aside to fund a move should we decide to move to a more rural location. Living in a low property value area, we would not release much in the way of funds if we were to downsize (we wouldn't sell just to stay in the same area).

If it's something you're considering, I'd suggest taking a few long holidays in smaller properties. We did discuss whether we would downsize as part of a rural move, but after a few holidays in two bed bungalows we found them too cramped for anything other than a short stay. 

numptydumpty18

We are planning to 'right size' but don't expect to release any cash. Hope to move to a lower maintenance more accessible property to help in later life. It's proving difficult to find somewhere that ticks all the right boxes though.

jimi_man

We have our Surrey house for sale and we are planning to move well away from the SE. A similar size house (4/5 bedrooms detached) so there will be an element of downsizing purely due to the differential in house prices, but it won't be a huge amount (max probably £100k) so it's not featuring in our planning. 

Unless you're planning to move to a small flat somewhere, downsizing will rarely release enough in the way of funds. 

jim8888

We did it, but pitfalls to watch out for are that you don't end up with the money you think you might - we spent loads getting the new house into how we'd like it. Secondly, work hard at building new connections and networks where you're moving to, maybe even before you get there (I joined the local golf club months before I moved to the new house.) And, as others have mentioned, don't underestimate the benefits of having space in which to do your own thing, so don't downsize too drastically! 

Silvertabby

Beeblebr0x said:

I'd avoid equity release like the plague. You can be sure the company will benefit handsomely at your expense.

It depends on your circumstances.  We don't have children to leave our house to, just niblings with expectations (even though they have never so much as returned a birthday or Christmas card).

If one of us does need nursing home care in the future, the plan is for the other to take maximum equity release in order to pay for a local nursing home of our choice, instead of whichever council 'over my dead body grove' happens to have a vacancy.

Even if neither of us needs nursing home care, then we would probably still take out equity release to pay for all the help needed to be able to stay on in our own home.

dunstonh

Beeblebr0x said:

I'd avoid equity release like the plague. You can be sure the company will benefit handsomely at your expense.

That is far too simplistic and whilst it should be positioned as an option of near last resort, there are plenty of scenarios where it is the best course of action.

Cobbler_tone

jimi_man said:

Unless you're planning to move to a small flat somewhere, downsizing will rarely release enough in the way of funds. 

Apart from people like my lucky colleague. He would have earned c£50k a year throughout his working life. He sold a pretty modest (but nice) family terraced house in Notting Hill and moved to the Peak District with well over a million in the bank. All about location, timing and your desire/ability to relocate. 
If you have any house worth £300-500k in a lot of areas in the UK you have options but depends on the definition of 'enough'. Enough to retire just on the gain, probably not....whether you would want to live in some of those options is a different matter!  

If people fail to realise the cost of estate agents, stamp duty, legal fees and removals, as well as the associated stress levels....that is 'moving house 101' and they should probably stay where they are! Downsizing/upsizing for practical reasons normally makes more sense.

ali_bear

Many now live in settings where having a car is more or less essential, but sooner or later you will have to give up driving. Moving into a medium sized town near the center, close to the doctors and shops makes sense. Do it before your age makes the process itself and the adaptation too difficult. Unless you have a lot of spare capital or are happy to really downsize, the place you are moving to probably won't be as nice as the one you are currently in.