Nearly half of all homeowners thinking of moving within the next three years plan to downsize, says Lloyds Bank.

What's the latest?

Downsizers moving from a detached property to a semi-detached could be in line for a £117,230 windfall.

But unsurprisingly, it's Londoners who are set to make the biggest profit from downsizing. They stand to make an average of £201,052 from trading down, according to Lloyds Bank.

The research revealed that nearly half of all homeowners thinking of moving within the next three years plan to downsize.

And the average age of a downsizer currently stands at 53, at which point 37% of them had lived in their current home for between 11 and 20 years.

Why is it happening?

More than half of those surveyed want to downsize to somewhere more suitable. Other reasons include cutting bills and freeing up equity (39%) and tapping into extra cash for retirement (31%).

A fifth of downsizers are doing so earlier than anticipated, for reasons including their health, relationships and a desire to be closer to local amenities. And a third plan to move to a more affordable area.

Three quarters of downsizers expect to profit from their move, with 35% saying they plan to reinvest the proceeds into a new home. Meanwhile, 29% hope to invest in other financial products and 21% plan to invest in their pension or pass the earnings onto their family.

Who does it affect?

Downsizing is healthy for the entire housing market – and it helps young families in particular, explained Mike Songer, mortgage director with Lloyds Bank.

“Downsizing...helps keep the housing market moving and frees up larger properties which could be perfect for young families about to take their next step up the property ladder.”

Sounds interesting. What's the background?

“Downsizing...helps keep the housing market moving and frees up larger properties which could be perfect for young families about to take their next step up the property ladder.”

Over the last decade, downsizers in the south west have seen the biggest rise in what they could gain from moving to a smaller property. 

Songer added: “We typically think of people moving to bigger houses as they move up the housing ladder, but people are increasingly looking to downsize their home because their circumstances or priorities have changed.

"While financial gain may not be the main driver for those looking to trade down their property it is clearly a factor, with three quarters of downsizers expecting to profit from such a move."

Top 3 takeaways

  • Trading down from a detached to semi-detached home could free up £117,230.
  • And downsizers in London could make a £200,000 profit by moving.
  • 46% of homeowners considering moving within the next three years plan to downsize.

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