Higher energy costs and rising interest rates are leading to a surge in the number of homeowners looking to downsize, a property expert claims.
It comes as higher than expected inflation figures last week prompted speculation that the Bank of England may raise interest rates to 5%.
Jonathan Rolande of the National Association of Property Buyers (NAPB) said he is seeing a move towards people being more open-minded to downsizing now than they were five or 10 years ago.
He said: “The main thing driving this is heating costs. It isn’t just the size of a property but also its age and construction that can lead to sky-high energy costs. That’s why many older owners are considering selling up to avoid expensive work to make their home cheaper to run.
Rolande said estimates suggest more than £10,000 needs to be spent to move an average Band F or G home to a C on the Energy Performance Certificate scale.
On the impact interest rates are having, he added: “With recent hikes, owners of larger, underused homes see sense in selling up to move down and pay off the outstanding mortgage rather than having to find monthly payments.
“Rates for equity release have also climbed, making this a less attractive prospect than it once was.”
Rolande said a third reason behind the downsizing surge could be linked to repairs and maintenance.
He added: “We’ve seen labour and material costs rocket too, which means carrying out day to day repairs, maintenance and renewals is more expensive than ever. This is tempting some to look at smaller properties and gardens.”
He added that the prospect of interest rate rises due to inflation remaining above 10% could damage the property market.
Rolande said: “Those working in the property sector are desperately hoping for a peaking of interest rates as this will deliver renewed confidence and impetus. It would also encourage sellers and buyers into the market.”