Brokers urged to help clients navigate downsizing decisions
A growing number of UK homeowners are planning to downsize over the next parliamentary term, with financial pressures and housing costs driving the shift, according to new research from Suffolk Building Society.
The study found that 15% of homeowners — equating to around 6.3 million adults — are either considering or intending to move to a smaller property within the next five years.
The data also reveals a regional divide, with 10% of homeowners in the North considering downsizing, compared to 14% in the South. In London, the figure rises to 25%, reflecting the impact of high property prices and the cost of living in the capital.
While downsizing is a long-established option for homeowners, the mutual lender said it has gained fresh relevance in the current economic climate. Moving to a smaller or more affordable property can reduce monthly bills, cut mortgage payments, and potentially release significant equity.
Utility savings alone can be substantial. Uswitch analysis of Ofgem data shows that a one-to-two bedroom home carries an average dual fuel bill of £115.14 per month. In contrast, a home with five or more bedrooms averages £228.74 — a difference that can add up over time.
Suffolk Building Society also suggests that rising house prices and mortgage costs are making downsizing more appealing. With the average UK property priced at 8.5 times average earnings, many homeowners may also be seeking to unlock capital to help younger relatives enter the housing market.
“Not every downsizer needs a mortgage, but an increasing number do, due to the rising cost of living and current property prices,” said Charlotte Grimshaw (pictured), head of intermediaries at Suffolk Building Society. “For some, it’s a repayment vehicle for an existing interest-only mortgage that’s come to the end of its term. Therefore, it’s an important conversation for brokers to be having with their clients.”
She also highlighted the role brokers can play in guiding clients through this decision. “Encouraging homeowners to think about downsizing earlier rather than later means they’re well prepared to move at a time that suits them – or enjoy the cash they may free up from it. Being aware of all options of homeownership, including downsizing, means that people can make informed decisions in a timely manner and consider just what the right option for them looks like."
Grimshaw also pointed out that increased downsizing could also ease pressure on the housing market.
“Downsizing could also help to free up some of the UK’s housing stock and create momentum in the market for buyers, with larger houses becoming available for growing families,” she explained. “Over time, this may make it easier for more people to get onto the property ladder, as housing stock becomes available at the lower end. It could also benefit those further up who may be feeling the financial squeeze from the cost of living or looking to support their grown-up children.”
While the government has committed to building more homes, Suffolk Building Society sees a case for interim solutions.
“In setting out targets for new home construction, the government clearly acknowledges the UK's housing crisis,” Grimshaw said. “Certainly, more homes are needed to meet demand. But we’d also welcome some shorter-term policies, such as encouraging downsizing, to get the housing market moving across existing housing stock, while the building sector gears up to meet the challenge.”
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