Downsizing to a semi-detached could free up £120k
Homeowners downsizing from a detached property to a semi-detached could free up around £121,686 on average.
Moving from a detached to a bungalow - the most common option for downsizers – could result in an average windfall profit of £103,715, analysis from Lloyds Bank has found.
Compared to a decade ago, the potential amount owners can make through downsizing has risen significantly. Those moving from a detached property to a bungalow could now make £8,000 more compared to 2004, with someone downsizing today receiving an average of £103,715, compared with £95,634.
Unsurprisingly given the demand for housing in the South East, downsizers in London stand to make the most, with potential sums reaching an average of £289,927 if switching from a detached property to a bungalow.
Those buying in East Anglia saw the largest average increase in potential gains over the past 10 years (£24,500, a rise of 38%) followed by the South West (£22,664 and 32% respectively) and Northern Ireland (£11,477, 29%).
The bank found that more than half of homeowners (52%) plan to sell their property to move to a smaller property in the next three years.
When asked why they wanted to downsize, nearly two-thirds (63%) of homeowners said a smaller property would better suit their circumstances, while 40% said it would help reduce their outgoings.
Meanwhile, more than a quarter (28%) are looking to release equity, while 25% are looking to fund their retirement plans. The average age of a downsizer is 56.
Andy Hulme, mortgages director at Lloyds Bank, said: "Downsizing is clearly still a major part of the housing market with over half of potential homemovers considering a smaller property. The volume of downsizers is therefore helping to keep the market moving, freeing up larger properties for those making their way up the ladder.
"Once people do look to trade down, the benefits are clear. Downsizing can generate significant amounts of money, on average over £100,000 in 2014. It also helps to lower the cost of household bills and frees up funds so that people can enjoy their retirement or invest their money for the future."
An unexpected one-off financial gain in cash or shares, generally when mutual building societies convert to stock market-quoted banks. Also windfall tax, a one-off tax imposed by government. The UK government applied such a measure in the Budget of July 1997 on the profits of privatised utilities companies.