The decision to sell up and move to a smaller property could come as a result of children flying the nest, the need to free up cash, or both. Whatever the reason, there are costs to downsizing that are important to know about before you make the move.
The ‘hidden’ fees
Research from online estate agent OwnerSellers.com suggests it costs an average of £17,843 to downsize, thanks to estate agency fees, stamp duty, conveyancing fees, surveys and removal costs. These add up to a sizeable chunk that can eat into any equity released from the sale of the house.
The figure is based on downsizing from a detached family home in England worth £381,211 to an average two-bedroom apartment costing £268,174. In principle the move would free up £113,037, but when you take into account the additional costs this drops to £95,194.
Reducing the cost of downsizing
If you’re thinking of downsizing, there are ways to reduce the fees you’ll incur. For instance, if you’re looking to relocate, you might be moving to a cheaper area where properties don’t attract as much stamp duty. Estate agency fees can vary so it pays to shop around for offers; like free valuations, or no up-front fees, or perhaps choose an agent who’ll sell your property for a fixed fee.
If you still require a mortgage after downsizing, we can help you find the right mortgage rate for your circumstances, particularly as we have access to some exclusive deals that you may not be able to get on the high street.
Researching all the costs up front, from stamp duty and estate agency fees to conveyancing and finding the right mortgage can help make downsizing work out for you financially.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please talk to us if you’d like any help or advice on your next property move.