You are here: Home - Mortgages - Remortgage - News -

Third of UK households consider downsizing, relocating or cohabiting

0
Written by: Anna Sagar
16/11/2022
Around 30% of British homeowners have considered moving to a smaller property, relocating or living with others to save money due to the effect of the cost-of-living crisis.

One in five people (17%) said that downsizing is something they had considered, while nearly double this number (34%) who live in Central London said they were thinking of downsizing or relocating.

According to Halifax research, Yorkshire and Humber residents were least likely to consider downsizing at 12%, and those in the North East were least likely to consider relocating.

Only 4% of those surveyed have moved to a smaller home to meet increasing costs, but more and more are considering it.

Around two thirds (60%)  said moving to a smaller home would be something they might consider to help with the cost of living.

The reduced cost of living was the most commonly cited benefit, with 72% of respondents citing it while a third said this was their number one benefit.

Halifax said that moving to a home with one less bedroom would on average raise £120,820. This compares to participants’ expectations of £105,000.

Bedroom premium alive and well

Average house prices in the UK vary greatly, and also vary based on the number of bedrooms.

For instance, those in London with five bedroom homes could service a four bedroom home for £370,000 less and save around £18,000 in mortgage payments.

Halifax said the “per bedroom premium” falls with smaller properties but moving from a three bedroom to a two bedroom home was £125,000 less with homeowners predicted to save £600 each month on their property finance.

The greatest difference across the UK was between five and four bedroom properties, and between four and three bedroom properties, with the average monthly mortgage saving at £935 and £809 respectively.

Potential downsides of moving

However, Halifax said that moving costs could be a downside to downsizing as 39% put it in their top three.

This was followed by lack of personal space for belongings at 38%, distance from family and friends at 29% and being in an unfamiliar area at 28%.

Halifax added that expectations of how close a smaller property would be was “ambitious”, with the average distance people expected to move set at 29 miles. Those who have already downsized moved 54 miles on average.

Kim Kinnaird, Halifax’s mortgages director, said: “With many people looking at the options to make their money go further and get the most out of the assets they have, moving to a smaller home is something that many people might consider.

“For those where it is an option, downsizing can lower mortgage costs that could help with the cost of living or release significant equity for a financial buffer. But it’s not without its own challenges. The time it can take to move home, distance from friends and family, and the reduced space can all put a question mark over whether the move to a smaller home could work.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week