It would be fair to say that downsizing has been in the news more than ever before over the last few years. It wasn’t long ago that we had a real surge in the concept, as mainly the elderly attempted to take advantage of all of the benefits they had been told about. Then, something changed. Downsizing stopped becoming a trend and if anything, people became warier about it.
One of the reasons behind this apprehension is probably the hidden costs. Put simply, even though you will save in terms of the equity of your home, there are a whole host of other financial factors that you need to consider. All of this is in addition to pre-paying to plan for a funeral, elderly care and all of the other finances associated with getting a little older.
Let’s now take a look at some of these downsizing costs that are often overlooked.
Stamp duty will still impact you
You might be downsizing, but we really would urge that you research stamp duty before you make this final decision. There’s still a high chance that your new home is going to qualify for such a cost and suffice to say, this won’t be small. Check out this frightening resource highlighting stamp duty costs to see our point in full detail.
You still have to physically move items
This next cost might not be quite as substantial as the previous one, but it still needs a mention. If you happen to be slightly older, and perhaps don’t have help from friends and family, moving everything from your existing house to your new one is probably out of the question.
It means that you need to tap into the experts – and this costs money. Sure, it’s a drop in the ocean when compared to the overall cost of buying your home, but it’s something that needs to be considered. You’ll find that a lot of these so-called smaller costs creep into the process and suddenly, you’re left with a bill that ruins your downsizing savings.
The cost of perfecting your existing home
This final point is perhaps one of the most interesting ones, as very few of us actually think about it. Sure, moving house is exciting, but you also have to have one eye on the practicalities when it comes to downsizing. You’ve probably been in your existing property for quite some time and some areas may require a little work to get them up to modern-day standards.
After all, styles change, and what might have been fashionable when you bought your home no longer satisfies the market. It means that you sometimes have to invest money into your home, just to give it a fighting chance of selling. Sometimes you might be lucky and just have to pay for the smaller items, but there can be occasions where tens of thousands of pounds need to be spent. By doing this, the financial benefits of downsizing are pretty much eradicated.