According to Halifax research, around 17 per cent have said that downsizing is something that they had considered.
Those living in Central London were more likely to consider downsizing or relocating at 32 per cent respectively.
Yorkshire and Humber residents were least likely to consider downsizing at 12 per cent, and those in the North East were least likely to consider relocating.
Only four per cent of those surveyed have moved to a smaller home to meet increasing costs, but more and more are considering it.
Around two thirds, 60 per cent, said moving to a smaller home would be something they might consider to help with cost of living.
The reduced cost of living was the most commonly cited benefit, with 72 per cent of respondents citing it and a third said it as their number one benefit.
Halifax said that moving to a home one bedroom smaller would on average raise £120,820. This compares to participants’ expectations of £105,000.
Bedroom premium alive and well
Average house prices in the UK vary greatly, and also vary based on the number of bedrooms.
For instance, those in London with five bedroom homes could service a four bedroom home for £370,000 less and save around £18,000 in mortgage payments.
Halifax said the “per bedroom premium” falls with smaller properties but moving from a three bedroom to a two bedroom home was £125,000 less and could save £600 each month on their property finance.
The greatest difference across the UK was between five and four bedroom properties, and between four and three bedroom properties, with the average monthly mortgage saving at £935 and £809 respectively.
Moving costs, lack of space and distance from family and friends potential downsides
However, Halifax said that moving costs could be a downside to downsizing as 39 per cent put it in their top three.
This was followed by lack of personal space for belongings at 38 per cent, distance from family and friends at 29 per cent and being in an unfamiliar area at 28 per cent.
Halifax added that expectations of how close a smaller property would be was “ambitious”, with the average distance people expected to move set at 29 miles. Those who have already downsized moved 54 miles on average.
Kim Kinnaird, Halifax’s mortgages director, said: “With many people looking at the options to make their money go further and get the most out of the assets they have, moving to a smaller home is something that many people might consider.
“For those where it is an option, downsizing can lower mortgage costs that could help with the cost of living or release significant equity for a financial buffer. But it’s not without its own challenges. The time it can take to move home, distance from friends and family, and the reduced space can all put a question mark over whether the move to a smaller home could work.”
