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One of the most commonly asked questions about downsizing is whether moving to a smaller property makes financial sense.
After factoring in the various costs of moving, most downsizers will be looking at an overall bill of more than £10,000, but you can make savings on some services by shopping around.
Here, Which? outlines the five biggest costs of downsizing, and offers advice on the things you should consider before making the move.
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Stamp duty is often cited as a major barrier for people looking to downsize, and it's true that it can add thousands to the cost of moving.
Stamp duty is a tax payable on property purchases across the UK. It's called Land Transaction Tax in Wales and Land and Buildings Transaction Tax in Scotland.
The table below shows how much you'd need to pay at four different price points.
| Country | £200,000 | £300,000 | £400,000 | £500,000 |
|---|---|---|---|---|
| England/Northern Ireland | None | £2,500 | £7,500 | £12,500 |
| Wales | None | £4,500 | £10,500 | £18,000 |
| Scotland | £1,100 | £4,600 | £13,350 | £23,350 |
The Chancellor will announce the government's Spring Budget in early March, and changes to property taxation haven't been ruled out.
Stamp duty is always a big talking point ahead of a Budget, and there has been clamour for the tax to be abolished for downsizers.
This may or may not come to pass, but with a general election looming, it wouldn't be a shock if the Chancellor unveils new property pledges.
Most sellers appoint an estate agent to market their home. Estate agent fees are usually charged as a percentage of the sale price of the property.
Exactly how much you'll pay will vary depending on the services offered by the agent, the contract terms, and the discount you negotiate (it's always worth a try).
According to the house selling website The Advisory, the average estate agent fee for a sole agency agreement is currently 1.42% (1.18% plus VAT).
| Selling price | Estate agent fee (1.42%) |
|---|---|
| £200,000 | £2,840 |
| £300,000 | £4,260 |
| £400,000 | £5,680 |
| £500,000 | £7,099 |
| £750,000 | £10,650 |
You may be able to get a cheaper fee by using an online estate agent: some charge flat upfront fees rather than a percentage of the sale amount.
The caveat is that these fees are often payable regardless of whether your home sells. Make sure you read the small print before committing.
After you've had an offer accepted on a property, you'll need to appoint a conveyancer (property solicitor) to deal with the legal aspects of the move.
The process is slightly different in Scotland, where offers must be made via a conveyancer. This means you'll need to appoint someone earlier in the process.
Conveyancers have a wide-ranging role in the homebuying process, including carrying out searches, checking contracts, registering the purchase and settling the stamp duty bill on your behalf.
The seller's estate agent may encourage you to use its recommended conveyancer, but you may be able to save money by shopping around yourself.
Data from the price comparison site Reallymoving shows the average cost of conveyancing for home movers was £2,038 in 2023.
Before committing to buying a home, it's important to get it checked over for any major issues by a professional surveyor.
House surveys vary significantly in price, depending on which 'level' of survey you choose and the size and value of the property you're buying.
For a new-build home, a very basic survey to check the property's condition could be sufficient. This might cost £500 or less.
However, if you're buying a very old or unusual property, you may require a full structural survey, which could cost more than £1,000.
You can shop around to find a suitable surveyor. As a starting point, the two main membership bodies for surveyors are the Royal Institute of Chartered Surveyors (Rics) and the Residential Property Surveyors Association (RPSA).
It's difficult to estimate an average cost for removals, as services vary significantly.
You might want to hire a van and drive it yourself, or you might employ a removals company to package and deliver all of your belongings to your new home.
Reallymoving says the average cost of removals in 2023 was £699. This is based on median quotes provided by removals firms for customers with two or more bedrooms, moving less than 30 miles.
Again, you may be able to save money by shopping around, especially if you're moving home at a quieter time of the year, or midweek rather than the weekend.
If you haven't already paid off your mortgage, or will still have a mortgage when moving to the new property, you'll need to factor in mortgage fees.
If you move home while still in your fixed term, you may need to pay early repayment charges to your mortgage lender. In some cases, these can run to thousands of pounds. If you can't wait until the end of the fixed term to move, take advice on porting your mortgage.
If you'll need a new mortgage for the property you're moving to, you may need to pay a fee. Some of the lowest-rate deals come with fees of £1,000 or more.
Consider taking advice from a mortgage broker on your options.
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