£29,000 That’s the true cost of downsizing (and stamp duty’s only the half of it!)

OLDER homeowners who decide to downsize to a smaller property lose £29,000 on average to moving costs, Money Mail can reveal.

The crippling sum is made up of a long list of bills, which include stamp duty, estate agency fees, surveys, legal costs, removal fees and refurbishment costs.

The sum eats into capital that they had hoped to use to help make ends meet or fund a more comfortable retirement.

Downsizing is an increasingly appealing prospect for older homeowners, who turn to money tied up in their property to boost their retirement income.

New figures suggest that almost hal f of al l pensioners, or 5.7 million people, are considering releasing equity by moving to smaller homes — and that figure could hit 11.1 million by 2036, as Britain’s population ages.

However, the cost of moving is a huge obstacle for many home-owners, and for some it’s simply not worth their while to move once these costs are factored in.

Our research shows it’s a myth that older people are ‘ home-blockers’ — insisting on remaining in oversized family homes that could go to younger buyers.

The typical would-be downsizer lives in a four-bedroom house but wants a twobedroom property. While the average four-bedroom home is worth £490,284, according to property listings website Zoopla, the average two- bedroom property costs £292,797.

Government stamp duty on the house being purchased is often blamed as the biggest barrier to downsizing. You pay nothing on a property costing below £ 125,000, 2 pc on homes priced between £125,000 and £250,000, and 5pc on homes above £250,000.

For the average two-bedroom home, stamp duty would total £4,640.

There have been widespread calls for the Government to cut stamp duty for older buyers to ease the cost of moving.

Around 1.2 million more over-65s would move with a stamp duty exemption, according to a survey by retirement property firm McCarthy & Stone.

According to Which?, the average estate agency fee for selling a property is 1.8 pc. In our example, the bill for selling the family home would come to £8,825, plus VAT, making it £10,590.

Many people underestimate the cost of renovations, repairs and redecoration. On average, new homeowners spend more than £ 10,000 doing up their property in the first year, according to insurer Aviva.

Meanwhile, conveyancing fees for buying and selling will set you back an estimated £2,000. This covers the legal and administrative work associated with transferring the ownership of land or buildings. A solicitor will also carry out searches that will make sure there are no plans to build a high-rise block of flats or open a nightclub next door.

There’s also a fee for a homebuyer’s survey carried out on the new property at an average of £600.

Packing and moving the contents of a four-bedroom house is likely to cost a further £1,000.

In all, the average move costs an eyewatering £ 28,830. That would leave a pensioner swapping a four-bed for a twobed with £ 168,657 after the move.

Baroness Altmann, the former pensions minister, says: ‘The cost of downsizing is crippling for older people who might want an easier life in a smaller property, or need to release cash to pay off debts.

‘I would love to see the Government encourage people to move if they want to, rather than putting them off with high costs such as stamp duty.’

For some older people, the large family home might no longer suit them or be too expensive to maintain.

An easier-to-run home with fewer stairs, reduced outgoings and a smaller garden can be an attractive proposition.

Many move purely for an income boost, while around 1.9 million are being forced to move to a cheaper property to clear interestonly mortgages.

Moving won’t be an option for those where the numbers don’t add up. Buyers looking in expensive areas in market towns or small cities, where shops are within walking distance, might struggle to find an affordable home. And if a bungalow is your ideal, these are often in short supply and therefore expensive.

Downsizers who seek out retirement housing face even larger costs. These types of homes are popular with those keen on living alongside likeminded people and seeking company — and care, if and when they need it.

But not only are properties often expensive to buy — a two- bedroom flat in an Audley retirement village in Redwood, Bristol costs £520,000, for example — there are many other charges.

Retirement villages typically offer a central clubhouse with hotel-like facilities. Restaurants, gyms, swimming pools, wine-tasting, bridge and yoga classes look great in the glossy brochures, but they attract hefty service charges of up to £5,000 a year.

You might also need to pay for having a warden or manager on site. A further charge is made to cover ground maintenance, external property maintenance, a mini-bus service to and from shops and events, buildings insurance, security and even window cleaning.

Buyers should also be aware that exit fees are sometimes applied when you sell.