You may clearly remember what it felt like to purchase your first home. You might recall the excitement of receiving the keys, unpacking your furniture, and making the new space your own.
Yet, while the term “first-time buyer” is well known, you may not be familiar with the idea of a “last-time buyer”.
It refers to people who decide to move into a home better suited to their changing lifestyle and needs, often in retirement.
According to a survey reported by the Independent, 47% of respondents between the ages of 66 and 74 said they had moved home since the age of 50.
Despite this, there is a shortage of affordable, age-friendly housing available for those wishing to make the move.
As you look ahead to retirement, you may decide that downsizing could make your life more practical and manageable.
However, before you decide, it’s vital to weigh the benefits and potential drawbacks of this move. Continue reading to discover some of these considerations.
Downsizing could free up wealth for retirement and allow you get closer to loved ones
Downsizing can offer several practical and financial advantages, allowing you to make the most of your retirement – here are three key benefits.
1. You can release equity from your home
One of the main reasons you might choose to downsize is to release equity from your home. If you have owned your property for many years, it may have increased in value since you first purchased it.
If you decide to sell your current home and move to a smaller, less expensive one, you could unlock a portion of that value.
You can then use the money released to fund your retirement lifestyle, support loved ones, or simply provide an additional financial buffer for unexpected expenses.
Freeing up equity in this way could offer some much-needed peace of mind, especially if you want greater flexibility over your finances.
It may also reduce the need to draw as much from your pensions or investments, helping your savings last longer.
2. Your bills might be cheaper
As you might expect, moving into a smaller property can make your ongoing expenses more manageable.
Maintaining a large home can become increasingly expensive over time, especially as energy prices fluctuate.
Meanwhile, reducing the size of your home could mean that your monthly bills fall significantly.
What’s more, if you still have a mortgage, you might be able to reduce or clear it entirely by purchasing a less expensive property.
Lower housing costs could make a considerable difference to your disposable income each month, allowing you to enjoy your retirement even more.
3. You could move to a better location
Downsizing may also allow you to relocate to a more convenient area.
For example, if you currently live in a rural area, moving closer to local amenities – shops, healthcare services, public transport, and so on – could make daily life easier and improve quality of life in retirement.
You might also decide to move closer to your family, giving you more opportunities to spend time together.
For many retirees, being nearer children or grandchildren makes it easier to create lasting memories, which can be challenging if you live in a more isolated location.
Moving to a smaller home could result in significant financial and emotional costs
While downsizing has advantages, it also brings a number of challenges worth considering – here are three.
1. There is currently a shortage of suitable homes
As mentioned, one of the obstacles for last-time buyers is the limited supply of appropriate housing.
Research from the HomeOwners Alliance found that 34% of homeowners over 55 considered moving in the last two years but decided against it, often citing a lack of suitable properties.
The same study showed that 38% of respondents would prefer a bungalow for their next home, a type of property in short supply in many parts of the UK.
This shortage could mean that finding a home matching your preferences and budget takes longer than initially anticipated.
2. You could face additional costs
Although downsizing can reduce your ongoing expenses, the process itself can involve significant upfront costs.
Indeed, if you purchase a property worth more than £125,000, you will typically need to pay Stamp Duty Land Tax (SDLT) in England and Wales. As of 2025/26, the rates stand at:
- 2% on the portion from £125,001 to £250,000
- 5% on the portion from £250,001 to £925,000
- 10% on the portion from £925,001 to £1.5 million
- 12% on the rest.
As well as this, you will likely need to cover estate agent fees, conveyancing costs, and professional surveys.
These expenses can quickly add up and may reduce the overall financial gain you expect from selling your larger home.
3. Moving often has an emotional cost
It’s also important to consider the potential emotional drawback of moving homes.
Uprooting your life can be stressful and time-consuming at any age. A survey reported by the Independent ranked moving house above childbirth as life’s most stressful event.
Moreover, if you’ve lived in your current home for many years, you may have a strong emotional attachment to it.
You may have raised a family or built a lifetime of core memories there. Plus, if you’ve settled in an area, you might find you miss small things – like a local coffee shop or restaurant – after you move.
Leaving this behind can be challenging, and adjusting to a new environment can often take time.
As such, it’s crucial not to underestimate the emotional toll of moving, especially if your goal in retirement is to enjoy a more relaxed pace of life.
Get in touch
We can help you weigh the benefits and drawbacks of downsizing so you can decide whether it’s the right move for you.
To find out more, please contact us by email at info@investmentsense.co.uk or call 0115 933 8433.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate tax planning.
Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.
