Where downsizers are moving to

Empty-nesters in their 50s and 60s are freeing up £350,000 on average from their homes, reports Imogen Tew

Over the past decade, the property market has been a fundamental way for British families to build wealth. The average detached property cost £268,000 in 2013, according to the Office for National Statistics. Today, that figure has jumped to £457,222.

While not everyone would have managed to ride this wave to the top of the property ladder, many baby boomers are now in a large family home that feels like an empty nest – and they are sitting on a lot of equity.

Rather than waiting until you are no longer able to maintain a large property to make a move to somewhere smaller, many “young” downsizers in their 50s and 60s have started to sell up in order to release some of the cash tied up in their homes. Moving from an average detached home to a smaller property in one of the 15 most popular downsizer locations could release between £120,000 and £350,000. Whether you use this windfall to bolster your retirement pot, help your children on to the property ladder, or simply treat yourself to a yearly luxury cruise, there are plenty of things to consider before making the move – not least picking a location to see you through to old age.

THE BEST DOWNSIZING LOCATIONS

The most popular location for younger downsizers aged 50 to 60 is East Lindsey, Lincs, according to research by Hamptons. With the coast on the east and the Lincolnshire Wolds (an Area of Outstanding Natural Beauty) to the west, nearly one in five people making the move to this area were in their 50s.

Homes cost an average of £235,000 in East Lindsey, so downsizing from an average- priced detached property would release around £220,000.

Many downsizers won’t be looking for an average home, however.

A key part of making the jump is to move to a property that has less maintenance and is closer to local amenities, so a terraced house or a flat may be more suitable. Terraced houses cost £157,000 (releasing just over £300,000 if selling the average detached UK property) while flats cost £106,000. Another hotspot was Torridge, Devon, with those aged between 50 and 60 accounting for one in six movers.

Property is slightly more costly here than in East Lindsey: the average house costs £309,000, while £230,000 would get you a terraced house and £153,000 could buy a flat.

Both areas have similar selling points. North Devon’s heritage coast runs along the north of the district, while Dartmoor National Park and Cornwall are its neighbours. In fact, many of the regions that feature in the top 15 spots for downsizers in their 50s have comparable qualities – many are coastal, surrounded by countryside and bustling with the type of smaller towns and villages that many envisage for their retirement. And they are certainly cheaper than London and its surrounding areas, in a sign that younger downsizers are quitting the rat race for a quieter, cheaper and more rural life. “There hasn’t been much movement in the sort of places where older households chose to move, with migration patterns fairly well entrenched,” says David Fell, lead analyst at Hamptons.

“Older movers typically head towards cheaper rural areas where their money goes further.”

HOW MUCH MONEY COULD YOU FREE UP?

The most expensive downsizing top spot was the Derbyshire Dales, according to Hamptons. Terraced homes cost £ 259,000 in the East Midlands beauty spot, while flats cost an average of £191,000.

Encompassing the Peak District and some of the country’s loveliest villages, while still neighbouring the cities of Sheffield and Nottingham, it is easy to see why the area comes at a premium. Despite this, one in six of those moving here are in their 50s.

Those downsizing from the average detached home will take a hit on the amount they release, however. Buying a terraced house would leave you with about £ 200,000, while you could get a windfall of £270,000 if you bought a flat.

Boston, also in Lincolnshire, is where you can get the most bang for your buck. You can buy a flat here for less than £100,000 and terraced houses in the area – which sits south of the Lincolnshire Wolds and near the east coast – cost little more, at £136,000.

Those selling an average family home and moving to Boston could release between £ 325,000 and £370,000.

WHAT ARE THE BENEFITS OF DOWNSIZING EARLY?

For most people, the main benefit of downsizing in your 50s is a financial one. If you move to a cheaper property and release the cash in your family home, this can be a welcome windfall as you get used to the idea of stopping work, and at a time when adult children are likely to be making big life changes. For those that are yet to pay off their mortgage, it can also be a quick way to get rid of a large monthly outgoing.

“I have seen people downsize to clear their mortgage and reduce their outgoings and then gift some of their equity to the children to help them buy,” said Michelle Lawson, mortgage adviser and director at Lawson Financial.

The ongoing costs of a smaller home and garden should also be cheaper – it should be cheaper to heat, cheaper to redecorate and (in theory) have cheaper council tax. Rita Kohli, managing director at The Mortgage Stop, said: “Downsizing often leads to a more manageable and cost-effective lifestyle, allowing for a focus on hobbies and community involvement.”

When choosing your new property, it’s important to make sure it’s as “future-proof ” as possible.

Make sure the area has good public transport links, a range of supermarkets and shops, and decent community activities.