Finding your dream home can be a challenge. You might need a larger property if your family is growing, or if your children have left home, you might be looking to downsize. There are advantages of both upsizing and downsizing in 2018. We asked our Guild agents for their opinions and advice on what is happening in the market that makes it good for either upsizing or downsizing.
“In Wakefield, we are seeing the £500,000-plus market booming in sales. A lot of this movement is due to downsizing. Many of the larger properties in more select suburbs rarely come on to the market, but when they do there is always considerable interest.
“Currently, Wakefield is a great opportunity for downsizing purely because of the interest to buy. Likewise, it’s an incredibly good place to upsize, with more property on the market and many more new build developments, both in the luxury and mainstream market. The choice has never been so abundant.
“There are pros and cons. Upsizing may be a dream but think of the practicalities. Your utility bills, council tax, and maintenance bills will be higher. General upkeep will be a much larger task; from gardening to cleaning, it will all take more time and resource. Downsizing might be more practical, but how will the lack of space impact on you? Your utility bills might be cheaper but will you be compromising? Maybe you hadn’t considered the need for a spare bedroom or a utility space, what about the outside space? Or simply the fact you’ll be much closer to your neighbours. For many, the realisation can sometimes be quite an adjustment.
“Ultimately, the best time to upsize or downsize depends on personal circumstances. You have to be fully aware of market conditions, your budget, and be honest about your needs and requirements, otherwise you could stand to lose out financially and emotionally.”
“In the London area over the past two/three years, we have seen prices softening, but this offers a fantastic opportunity to trade up to that dream house. When people sell, there is much focus on ‘what will I get for my house?’ It is an important question, but if you are planning to trade up to a more expensive property, is that actually the right question?
“For instance, if you have a property ‘worth’ say £1,000,000 and prices have dropped by 10%, this is now ‘worth £900,000 but you wish to buy a property that had a value of £1,750,000, and this too has dropped 10%, so is now available at £1,575,000. The gap between the 2 properties is £675,000. Had the prices been more stable, the gap would have been £750,000, so the saving now is £100,000.
"Equally, if prices are rising, again using 10%, we see the values being £1,100,000 and £1,925,000 respectively, a gap now of £825,000.
“This example shows how using a ‘poor market’ can be a great opportunity. Sometimes focusing on ‘how much can I get?’ is not the right question, when it should be, what is the difference I have to pay?"
“Strong buyer demand, affordable lending, and stable house prices make this a perfect market for both up-sizers and down-sizers here in the South West.
“Whether looking to move to a larger property or seeking to move to a smaller, easier to manage home, stable prices make it easier to plan and healthy demand from buyers who can afford to borrow help make the current market fluid. Moving up or down the market, actual and purchase prices are less important than the price differential between the two.
“Across the country, it seems that stock is an issue and whilst this may mean that new homes developers are taking a larger share of the market, competition between them is keeping prices steady.
“This doesn't mean that upsizers and down-sizers are so limited in choice though - it simply means that if they can't find what they're looking for, they need to work with an experienced local agent that provides a search and acquisition service.
“With over twenty years experience, dealing with thousands of homeowners, at any one time, we have hundreds of local people on our database who are looking to move - even though they are not on the market and advertised for sale.
“Over the last 12 months, we have seen an increase in property prices and therefore increased equity for homeowners. This can make it an ideal time to downsize and cash in on your investment. Recently, I valued a four-bedroom detached property. The owners bought their home in 2015 for £266,000 and would now expect it to achieve £300,000. There are not many investments that will give you a return of £34,000 in 2 years. They were looking to sell and downsize to go mortgage free.
“The main reasons we find people choosing to downsize is to release equity, go mortgage free, or the property they are in may be bigger than what they need. I believe downsizing is one of the hardest moves a person can make as comprise is needed. Therefore, our advice would be to think about what you are prepared to comprise on. If you only want a specific location, you may have to comprise on the size of the property or if off road parking is a must for you, you may have to give up that extra bedroom.
“The market offers advantages at the moment for those looking to upsize or downsize. Since November 2017, first-time buyers have not needed to pay Stamp Duty Land Tax (SDLT) on properties priced up to £300,000, which will speed up the time it takes them to save for their first home. Mortgage rates are still at a historic low, making a bigger mortgage more affordable for many people.
“You might be looking to upsize to accommodate a growing family or to downsize to release capital, reduce outgoings or if your children have left home. Whatever the reason, I would advise you to book a professional valuation and speak to a mortgage advisor before selling your home.
“If you’d like to upsize; plan ahead. Perhaps you’d like to relocate to be closer to catchment areas for schools. Consider the timing of the school year when planning your move and allow for any delays in the chain.
“Those looking to downsize should be realistic about the amount of space you need. Ask yourself: are you using all the space you’ve got or have you simply expanded to fill it? You’ll also need to consider the factors which are important to you, such as public transport, facilities and the local community."
“As the market cools off, opportunities can arise for those looking to up-size as larger properties come down in value more quickly than the lower end of the market, which is propped up by both first-time buyers and buy-to-let investors. This can create an opportunity for buyers to procure a large property at a lower price while still achieving a good price for their own.
“As the cost of living rises, down-sizing offers an opportunity to lower the running costs of your home and free up capital to spend on the refurbishment of a new, smaller property. The market has been rising for a number of years and, since 2016, has begun to cool, making this a good time to down-size, release large assets, cash in, and invest in a lower-value property, lowering your exposure to the market. With the cost-of-living rising, lowering your mortgage out-goings is always a wise move, too."
Are you thinking of upsizing or downsizing? Contact your local Guild Member to start your property search.