The property ladder is ascending as the metaphor suggests. People work their way up the ladder, which signifies them being able to afford and secure bigger and more expensive properties as they get older and more experienced. This goes hand in hand with many aspirations that people work towards whether it be starting and raising a family or building wealth for the future.
At some point, homeowners reach their pinnacle on the property ladder and descending the hierarchy makes more sense. You see this commonly with people entering retirement or after all the kids have moved out of the family home, at which point selling up and buying a smaller property makes more financial and practical sense. Below we explore why downsizing might be the right option for you.
Financial stability is a major consideration for those entering retirement or in later life, and downsizing your home can release equity that you have built up throughout your time on the property ladder. Once you’ve sold your house, paid off the balance of your mortgage and bought your new property – the surplus is available for you to do as you please. You might want to save it in an ISA, invest it or use it to fund travels or home improvements. Downsizing is an invaluable opportunity in this sense because it can give you some financial freedom to dictate your life in the future.
With the cost of living crisis roaring on, reducing monthly expenses is a luxury that few can actually achieve at the minute. However, downsizing your home can give you a real chance to do this. A smaller house should hypothetically cost less to heat and power, which should help to cut your monthly bills. Furthermore, if you can buy your smaller property outright from the equity built up in your previous home, you can escape the high levels of interest on mortgages being offered at the minute and reduce your monthly liabilities dramatically.
Maintaining a large property as you get older can be a challenging process too, so downsizing may help to reduce your workload when it comes to maintenance and cleaning. This could also help to free up your time so you can do the other things that you want to do with your life – whether it be exercise, spending time with family, cooking or anything else you enjoy.
Making the most of your time is important as you get older, and moving into a smaller property can give you more flexibility. Firstly, lower bills and potentially mortgage-free living could give you more financial freedom to travel without needing to work full-time to cover your basic expenses. You may also be able to relax more about leaving your property for longer periods, helping you to make the most of your time outside of the home as well as inside it.