A third of households consider moving to save money, Halifax says

A third of households consider moving to save money: Downsize, move and live with others on the cards, says Halifax mortgage giant

  • 17% have considered downsizing to reduce costs
  • But many more (60%) said they would not rule it out if circumstances changed.
  • Moving to a smaller one-bedroom house would raise, on average, £120,820
  • The cost of the move was cited as the main drawback of downsizing.
  • Rent and mortgage costs have risen in recent months

Nearly a third of households are considering changing their living arrangements to help with the cost of living crisis, new Halifax research has revealed.

The bank, one of the UK’s biggest mortgage lenders, said its survey found that three in 10 people surveyed (30 per cent) had already considered options such as downsizing, relocation or cohabitation.

Nearly one in five (17 percent) say they have thought about downsizing to help with rising costs.

Those living in central London were more likely to consider moving or downsizing to cut costs, with 32 per cent saying they had considered each, respectively.

Downsizing your house by one bedroom could free up over £100,000 in property cash

Of those surveyed, nearly two-thirds (60 percent) said that downsizing to help with the cost of living would be something they would consider if necessary, and would not rule it out.

Kim Kinnaird, Halifax’s director of mortgages, said: “With many people looking for options to make their money go further and make the most of the assets they have, downsizing is something many people might consider.”

‘For those where it is an option, the reduction can lower mortgage costs, which could help with the cost of living or free up significant capital for a financial cushion.

But it is not without its own challenges. The time it may take to move house, the distance from friends and family, and the tight space can put a question mark on whether downsizing might work.

When considering downsizing, 72 percent said saving money was one of the benefits, and a third (33 percent) named it the number one benefit.

According to Halifax’s analysis of house prices for houses of different sizes, moving to a smaller one-bedroom house would raise, on average, £120,820.

Money can be saved in all regions of the UK by downsizing a single room, with the majority of houses being 5 and 4 and 4 and 3 bedrooms. On average, the monthly mortgage savings could be £935 or £809 respectively.

However, there are drawbacks to downsizing. Moving costs were most frequently cited as one of the top negatives about moving to a smaller property (39 percent of people ranked it in their top 3 cons).

Mortgage prices have risen sharply in recent months, adding to financial woes

Mortgage prices have risen sharply in recent months, adding to financial woes

Distance from family and friends (29 percent) and being in an unfamiliar area (28 percent) were also high-ranking concerns about making such a move.

In recent months, mortgage costs have skyrocketed and rents are also rising to record levels across the UK.

The median rent for a property has reached £1,204 a month, according to Hamptons estate agents, and renter households now typically spend 44% of their after-tax income on rent.

cost of living

Before the mini-budget on Friday, September 23, the average two-year fixed rate across all loan-to-value tranches was 4.74 percent and the five-year fixed rate was 4.75 percent, according to Moneyfacts.

The rates now sit at 6.28 percent and 6.07 percent respectively, both having fallen since the base rate announcement on November 3. This is on top of a worsening economic environment.

New CPI inflation data will be announced this week and is expected to rise above its current level of 10.1%.

What to do if you need a mortgage

Borrowers who need to find a mortgage because their current fixed-rate agreement is coming to an end, or because they have agreed to purchase a home, have been urged to act but not panic..

Banks and building societies continue to lend and mortgages are still being offered and applications accepted.

However, rates are changing rapidly and there is no guarantee that the deals will last and not be replaced by mortgages that charge higher rates.

This is the best Money Mortgage Rate Calculator powered by L&C that can show you offers that match the value of your mortgage and property

What if I need to re-mortgage?

Borrowers should shop around and talk to a mortgage broker and be prepared to act to secure a rate.

Anyone with a fixed-rate agreement ending within the next six to nine months should consider how much it would cost to remortgage now and consider closing a new agreement.

Most mortgage deals allow fees to be added to the loan and are then only charged when you withdraw. By doing this, borrowers can lock in a rate without paying expensive setup fees.

What if I am buying a house?

Those with agreed home purchases should also aim to lock in rates as soon as possible, so they know exactly what their monthly payments will be.

Homebuyers should be careful not to overstretch themselves and be prepared for the possibility of house prices falling from their current high levels, due to higher mortgage rates limiting people’s borrowing capacity.

How to Compare Mortgage Costs

The best way to compare mortgage costs and find the deal that’s right for you is to talk to a good broker.

You can use our best mortgage rate calculator to display offers that match your home value, mortgage size, term, and fixed rate needs.

Keep in mind, however, that rates can change quickly, so the advice is if you need a mortgage, compare rates and then speak to a broker as soon as possible, so they can help you find the right mortgage for you. .

> Consult the best fixed-rate mortgages that you could apply for