SYS-CON MEDIA Authors: Lori MacVittie, RealWire News Distribution, Cynthia Dunlop, Mark O'Neill, Kevin Benedict

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More Homemovers Plan to Sell Up and Downsize to Help With Bills

LONDON, ENGLAND -- (Marketwired) -- 12/02/13 --


--  Downsizing continues to be the main reason to sell a home
--  43% of downsizers want a smaller property to help reduce bills and a
    third (37%) see downsizing as a way to help support their retirement
    plans
--  An average of GBP 97,722 can be potentially raised by downsizing home -
    with London the most lucrative place to do so, with an average amount of
    GBP 272,000

A new report from Lloyds Bank shows that downsizing continues to be a strong driver of property sales, with almost half (45 per cent) of homeowners planning to sell their property in the next three years saying they'd like to downsize.

Reasons for trading down

Over a third of potential downsizers (37 per cent) want to downsize to support their retirement plans and nearly half (43 per cent) said they wanted to reduce their bills and outgoings.

Nearly a third (31 per cent) said they were looking to free up equity so they could re-invest in something other than property or a pension, more than one in ten (12 per cent) wanted to invest in a pension and almost one in five (18 per cent) said they would give money to their family. 29 per cent of those considering downsizing are doing so earlier than they expected.

A third (32 per cent) of downsizers are looking to move to a detached house and a quarter (26 per cent) to a semi-detached house, while almost half (45 per cent) are looking to move to a bungalow.

Downsizing - more than just a retirement option

Those looking to retire may be the key population within the downsizing market but, in a continuing tough economic climate, it is an option being widely considered by younger generations, too. The survey showed that the average age of those looking to downsize was just 40 years old, with a quarter (26 per cent) of potential downsizers aged just 26 - 35. Another quarter (26 per cent) was aged 36 - 45 and a further quarter (24 per cent) was made up of potential downsizers aged 46 - 55.

Potential sums to be made from downsizing

For those trading down early, the potential amount that can be raised by downsizing from a detached property to a bungalow has risen by 12 per cent (or GBP 10,221) over the past decade; a downsizer today would receive an average of GBP 97,722; compared with GBP 87,501 in 2003. (See table 1)

The potential amount of cash homeowners could raise by downsizing their property from a detached home to a semi detached would have earned an average of GBP 116,474 in 2013; an increase of 13 per cent (GBP 13,910) since 2003. (See table 2)

Regional variations

Buyers downsizing from a detached home to a bungalow in the North saw the largest average increase of 35% (or GBP 20,360), followed by the East Midlands and the North West, which both saw rises of 23% (GBP 13,605 and GBP 17,088 respectively) and the South East (20% or GBP 27,026 - the largest rise in monetary terms).

Downsizers in the capital stand to make the most in monetary terms, with a downsizer in Greater London typically standing to make an average of almost GBP 272,000 from trading down from a detached to a bungalow.

On the other hand, those moving from a detached home to a semi in Scotland saw the largest overall increase in the average amount that could be made, at 22% (or GBP 17,657) over the past decade, followed by the South East and East Anglia (both 17%).

Property turnaround times

According to the report, while a third (34 per cent) of homeowners considering downsizing have lived in their current property for between 11 and 20 years and one in five (19 per cent) have lived in their current property for between 21 and 30 years, many are choosing to move a lot sooner: 23 per cent have only lived in their property for between 6 and 10 years and 11 per cent have lived in their property for just five years or even less.

Marc Page, Mortgages Director, Lloyds Bank, comments:

"There is no question that downsizers have a key role to play in the housing market, especially in a climate where it's not just those looking to retire who want to free up equity from their home by moving somewhere smaller.

"Many families view downsizing as a sensible way to lower their bills, help out their children or free up funds for retirement. However, selling your home is not a decision to be taken lightly. It's important to give careful consideration to whether trading down is the best solution for you and to seek professional advice first."

Table 1: 10 Year % Change in Downsizing Windfall: Detached to a Bungalow


============================================================================
                            Downsizing     Downsizing
                        windfall, 2003 windfall, 2013  10 year % 10 year GBP
                            (GBP )(ii)     (GBP )(ii)     change      change
============================================================================
North                           58,974         79,334        35%      20,360
============================================================================
East Midlands                   58,371         71,977        23%      13,605
============================================================================
North West                      74,245         91,333        23%      17,088
============================================================================
South East                     132,819        159,846        20%      27,026
============================================================================
Northern Ireland                43,890         52,336        19%       8,446
============================================================================
Wales                           55,734         65,646        18%       9,912
============================================================================
East Anglia                     74,976         84,650        13%       9,674
============================================================================
South West                      76,623         83,318         9%       6,695
============================================================================
Greater London                 252,169        272,060         8%      19,892
============================================================================
Scotland                        56,090         60,367         8%       4,277
============================================================================
Yorkshire and
 Humberside                     63,087         67,813         7%       4,726
============================================================================
West Midlands                   61,199         59,457        -3%      -1,742
============================================================================
United Kingdom                  87,501         97,722        12%      10,221
============================================================================

Source: Halifax database 12 Months to October

Note: (i) difference between average price of detached and a bungalow.

Table 2: 10 Year % Change in Downsizing Windfall: Detached to a Semi


============================================================================
                            Downsizing     Downsizing
                        windfall, 2003 windfall, 2013  10 year % 10 year GBP
                             (GBP )(i)      (GBP )(i)     change      change
============================================================================
Scotland                        81,055         98,712        22%      17,657
============================================================================
South East                     152,102        178,465        17%      26,363
============================================================================
East Anglia                     82,295         96,103        17%      13,807
============================================================================
South West                     104,752        121,643        16%      16,891
============================================================================
Wales                           82,568         93,659        13%      11,091
============================================================================
North                           79,877         90,514        13%      10,637
============================================================================
Yorkshire and
 Humberside                     93,393        101,309         9%       7,915
============================================================================
Northern Ireland                61,412         65,585         7%       4,173
============================================================================
West Midlands                  105,163        109,876         5%       4,713
============================================================================
North West                     100,246        104,522         4%       4,276
============================================================================
East Midlands                   88,475         90,415         2%       1,940
============================================================================
Greater London                 213,991        217,620         2%       3,629
============================================================================
United Kingdom                 103,284        116,474        13%      13,190
============================================================================

Source: Halifax database 12 Months to October

Note: (i) difference between average price of detached and a semi detached home.

NOTES TO EDITORS

House prices:

The prices used are simple arithmetic ('crude') averages. These prices are not standardised and therefore can be affected by changes in the sample from period to period. Data is from Lloyds with the average price based on the 12 months to August for each year analysed.

All other data is based on consumer research undertaken by BDRC Continental (bdrc-continental.com) on behalf of Lloyds Banking Group. Fieldwork took place in October 2013 and the previous wave of research took place in September 2012. Around 1000 (201 specifically with potential 'downsizers') interviews were collected from a representative online consumer panel of homeowners housed by Research Now.

This report is prepared from information that we believe is collated with care, however, it is only intended to highlight issues and it is not intended to be comprehensive. We reserve the right to vary our methodology and to edit or discontinue/withdraw this, or any other report. Any use of this report for an individual's own or third party commercial purposes is done entirely at the risk of the person making such use and solely the responsibility of the person or persons making such reliance.

Contacts:
Nikki Lehel
Senior Media Relations Manager, Lloyds Bank
020 8936 5883 or M: 07432 680 101
nikki.lehel@lloydsbank.co.uk

Christopher Tuttlebee
Lloyds press office
020 7356 1343
christopher.tuttlebee@lloydsbanking.com

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