Downsizing more popular among high-end earners
Homeowners that move to a smaller property for financial or practical reasons tend to be high-earning professionals, reports Savills.
According to the estate agent, this trend is a result of cheaper properties - compared to the prime housing market - which are not likely to release significant amounts of capital to justify the move.
With the Council of Mortgage Lenders estimating repossession rates will rise to 45,000 next year, downsizing could be an advisable move for those struggling to meet mortgage costs.
Lucian Cook, director of residential property at Savills, which deals predominantly in prime property, estimates “about 30 per cent of vendors are selling to downsize”.
“For properties over about £1 million, a relatively high proportion of people who are moving are downsizing,” he explained.
Downsizing could be an attractive option given current high interest rates on mortgages. However, Mr Cook highlights two additional financial drivers for downsizing.
“One of them is avoiding or minimising your inheritance tax, and the second one is facilitating your kids getting onto the housing ladder,” he said.
