Just over half of potential homemovers are looking to downsize within the next three years, compared to just a fifth looking to trade up to a larger property, according to the latest research from Lloyds TSB.
Reaching retirement is a big factor when it comes to contemplating downsizing to a more manageable home.
But the new report has found that it’s not the only reason in these tough economic times.
While 59 per cent want to move to a smaller property that is better suited to their circumstances, a third of potential downsizers would like to move to a smaller property to help reduce bills.
Almost two fifths would like to free up equity in the property and almost one in three said they want to downsize to help support retirement plans.
A fifth of those considering downsizing are looking to trade down earlier than expected, with the majority citing financial concerns as the key driver.
The report showed that over two thirds of homeowners considering downsizing have lived in their current property for over a decade.
However, one in five have lived in their property for between six and 10 years and over one in ten have lived in their property for only five years or fewer.
Stephen Noakes of Lloyds TSB said: “Downsizers are now playing a key role in the housing market and as the study shows we are starting to see homeowners on different stages of the property ladder considering it as a sensible option as more and more families are looking at ways to save money.
“While we have seen a significant rise in the potential cash windfall, downsizing can make a lot of sense for a wide range of people, it is important to consider carefully whether trading down is the best solution. Whether you are looking to lower utility bills, pay for an offspring’s tuition fees, or free up extra cash for retirement we recommend you seek professional advice before taking action.”
Those looking to trade down later in life have seen their potential cash windfall rise by more than 40 per cent over the past decade. Trading down from a detached home to a bungalow would have earned an average windfall of £97,298 in 2012; an increase of 41 per cent (£28,484) since 2002.