Have you ever wondered how to downsize? You wouldn’t be alone—a new report has shown four million over 55s plan to move to a smaller home in the future. 74% cited convenience as their primary motivation, whilst 28% pinpointed a financial motivation. For those looking to retire, downsizing can be a lucrative move to either help pay off your mortgage altogether, or to build up a pension pot.
So how much could you make by downsizing? The report revealed that most expected to make at least £100,000, with one in ten respondents hoping to achieve double this amount. A quick look at some data on average house prices shows potential downsizers may not be too far off the mark.
For those with children who have flown the nest, downsizing and losing unnecessary bedrooms is a potentially lucrative option. As an example, many London commuters buy large family homes in areas such as Surrey. In this leafy home county, even an incremental downsize can raise a significant amount of capital. One report pins the average 4 bed in Surrey as being valued at over £779,596; lose just a single bedroom and this price drops down to £654,883.
How to downsize using bridging finance
In an ideal world, your home will be neatly sold in time to assist you with your onward purchase. However, moving homes is rarely this simple—and if you’re wondering how to downsize, you may also be wondering what your options are if you find your ideal property before your old home has sold. As bridging finance becomes increasingly mainstream, more and more borrowers are using regulated short-term loans to assist with their financial requirements.
A short-term loan can therefore be a huge help when it comes to downsizing. Bridging finance has now become so mainstream that lenders are offering bridging products specifically designed to help clients move home. With terms generally available up to one year, a short term loan can help you to purchase a smaller property before your old home has sold—and with many bridging products coming without early repayment charges, you will still be able to enjoy most of the money you’ve made by downsizing.