Property owners in the United Kingdom attach clear economic conditions to moving to a smaller residential property. According to a survey by Barclays bank, this step is on average only worthwhile for those affected if an amount of £108,516 in equity can be released through the sale. Without this financial surplus, willingness to downsize remains muted.
A total of 2,000 people were surveyed for the study. The results highlight a noticeable interest in reducing living space: a quarter of surveyed owners are in principle open to moving to a smaller property. Nevertheless, in many cases these considerations are not put into practice.
Financial risks and upfront costs as key hurdles
Decisive for the hesitation are primarily the economic circumstances associated with moving. Seven out of ten respondents cited financial risks and immediately incurring upfront costs as crucial barriers. Transaction costs often reduce the proceeds of a sale so significantly that the remaining return no longer outweighs the burdens of relocating.
- —Average required equity release of £108,516
- —General willingness to downsize among a quarter of respondents
- —Reservations due to financial risks and upfront costs among seven out of ten owners
The demand for a six-figure sum illustrates owners' strong need for security. When incurred fees restrict financial leeway, many owners ultimately remain in their current living arrangements. The decision to sell is only made when a substantial amount of money remains after all costs have been deducted.
The Barclays survey underlines the tension between the general desire to downsize and practical market hurdles. As long as upfront costs remain high and the achievable capital surplus stays below the threshold of £108,516, many owners who are willing to sell are likely to refrain from taking concrete steps.
