The art of downsizing

The past 12 months has seen the notion of downsizing undergo a remarkable evolution, appealing to individuals at every stage of life. Once perceived as the next step for empty nesters transitioning into their golden years, downsizing has become a dynamic choice, embraced by those in pursuit of both financial prudence and a lifestyle shift.

If you’re considering downsizing, Knight Frank's Chris Jones and Laura Hackey, from the New Homes teams in Central London and the South East respectively, share essential considerations to ensure a smooth transition, how to maximise your investment and what the future holds for this expanding market.  

Why are your clients choosing to downsize?

Chris: Achieving flexibility is often the main reason for downsizing, whether that's to capitalise on unused space or release equity to invest into a second or holiday home as personal circumstances change. Many downsizers are retirees moving to the countryside or a favoured overseas location, often from a more urban setting. But not all downsizers are retirees. In recent years we’ve seen clients choosing to sell their home and downsize to release equity and help their children get on the ladder.

The Jephson Portfolio, Leamington Spa, Warwickshire. 20 beautifully crafted homes in a gated development set in 7.5 acres. Prices from £375,000

What key considerations should individuals keep in mind when downsizing?

Chris: Space. It can be challenging to downsize from a large freehold property to an apartment, for example. The first consideration is what to take with you and what has to go, which in itself can be hugely frustrating and stressful. New developments that offer generous living space are rare due to the economics of development and construction, but they do exist. When found, they are often a magnet for downsizers from a wide area, and as a result, tend to create unique communities of like-minded individuals.

Laura: Downsizing doesn’t mean you have to compromise. Grand proportions and large lateral living spaces are very sought-after. Downsizers are getting younger and so their needs are changing. They are either releasing equity or simply wanting to downsize from their larger family home that is becoming increasingly more expensive to maintain, now seeking a more sustainable home with the latest in technology, design and quality, which is driving this lifestyle change. When buying a new home, a developer will request a reservation fee to secure the property and will likely request an exchange of contracts within a four to six-week period from the reservation. Many developers sell off-plan, so a buyer may have the opportunity to specify their finishes, subject to the build stage.

Chiswick Green in London. One to three bedroom apartments, penthouses and townhouses in a development that blends urban living in a beautiful green setting. Prices from £580,000

How can downsizers ensure they are getting value for money?

Chris: Due to the challenges faced in finding the right property to downsize to, buying off-plan in a new build development can be the perfect way to secure the right property. The approach enables you to really take your time finding a new property that fits your needs and gives you space to list your existing property and secure the best price for it, rather than having to rush to find something in time to accommodate your buyers.

Laura: When buying a new home, a purchaser is expected to be in a position to proceed to exchange with a 10% deposit. However, some developers do promote schemes to ease the process such as ‘house-to-sell’ reservations or ‘easymove’, which allows a purchaser to reserve their chosen new home, subject to sale. The developer will hold the property for a fixed period, allowing purchasers the time to try and sell their home and in many cases, contributing towards estate agents fees.

Hurlingham Waterfront, Fulham. A collection of studio to four bedroom apartments in a sought-after Thames-side location. Prices from £595,000

What common mistakes do people make when downsizing, and how can they be avoided?

Chris: Getting the numbers wrong. It is crucial that you get the right advice on the value of your current home before you start searching for a property to downsize to. The highest price may not necessarily be the right one. It is important to do your research and look at what is selling in your neighbourhood and on your street, and speak to a local agent who knows the area well. 

Laura: Often, downsizers start looking for a property without having put their home on the market or taken advice from an agent. We would recommend starting this process first, understanding the value of their home and the expected timescales it may take to sell their home. There are lots of different options available, such has an off-market sales period versus a full marketing campaign, but it is worth starting with this rather than finding the dream home but being unable to proceed and subsequently missing out.

What impact has the economic landscape had on the downsizing market, and how do you see it evolving?

Chris: During 2023, many potential sellers decided to stay put rather than move. With interest rates starting to come down, we are now seeing increased buyer activity within the downsizer market, which, over the coming months, we expect to put pressure on the availability of suitable properties. It will also create more competition for your property when you come to sell, which may squeeze prices as we move from a sellers’ market to a buyers’ market.

Laura: COVID reinforced the need and want for outside space, and this remains of high importance to downsizers. The cost of living is also another reason for downsizing to a brand new home as they seek homes with low carbon heating, smart controls, sustainably sourced materials and car charging points, among other things.

Explore more brand-new homes for sale, or contact our agents in our New Homes team.