Rightsizing: What to do if a house isn’t your forever home

By Vicky Shaw

June 29 2022, 11:45 am

People consider rightsizing when they realise their home is too small for their needs - or the reverse.

What happens when your “forever home” doesn’t actually fulfil your long-term needs?

Many over-55s are in this position, according to new research from Paragon Bank.

Some 30% feel their current home is either too big, too small, or won’t be the right size for them as they age.

Calculating house prices and the cost of moving is a good first step and there are tools to help.

Paragon Bank’s report – the Rightsizing Challenge – found more than one in 10 (11%) over-55s feel their property is too big, and one in 20 (5%) claim their current home is too small.

Future needs

One in seven (14%) say while their property is the right size for them now, they’re still planning to downsize.

While many people would like to move to a home better suited to their future needs, a lack of suitable properties is a barrier and is contributing to rocketing house prices.

Despite a lack of homes to choose from, seven in 10 (71%) of those who feel their home is too big are planning to press ahead and move in the next five years.

Bungalows are the most popular type of property that downsizers expect to move to, followed by detached homes and flats.

Single-storey homes such as bungalows are a favourite choice for those looking to downsize.

While around nine in 10 (91%) would-be downsizers say they expect to own their next property outright, a further 4% say they plan to buy with a mortgage and 5% are expecting to rent.

And if they did manage to free up some cash by moving home in the next five years, just over half (52%) would keep it as cash.

Some 28% would invest it, and the same proportion would gift cash to family members. Those aged over 75 would be more likely to gift money to family, with 51% saying they would do this.

Many people say that they would splash out on things like a holiday with any extra cash.

Splashing out

Just over a quarter (26%) of people would also look to splash out on a “big-ticket item”, such as a holiday or car, while a fifth would look to use the money to upgrade their new home.

Those considering rightsizing will need to weigh up the costs carefully.

Home movers in Scotland face the Land and Buildings Transaction Tax (LBTT), for example.

Online tools can help would-be movers to work out the potential costs, for example an LBTT calculator can be found at revenue.scot

They could also help people decide whether adapting their existing home to make it better fit their changing needs may be more cost-effective.

A home can seem too big once a family has grown leaving people wanting something a little cosier.

Moving costs

There will also be surveyors’ costs, legal fees and furniture-removal fees.

Paragon Bank savings director Derek Sprawling said: “Many people in retirement age, or nearing retirement age, feel their home isn’t the right size for them.

“Whether it’s a family home where the children have left, or a well-loved property that simply isn’t right for their ongoing needs, it’s a dilemma facing many homeowners.

“Many people over the age of 55 who choose to rightsize will end up with a cash windfall.

“With half of people choosing to keep that finance in a cash savings account, it’s important they find the right account offering the best returns.”