Downsize now while the market holds or wait and risk it

General
1

Following on from my thread about clearing the mortgage vs the SIPP, the other half of the equation that I have been chewing on is whether to downsize the bungalow sooner rather than later. Three bed detached on the south coast, bought it in 2017 for £285k, probably worth around £340k now based on what has sold nearby recently though who knows if Savills are right about prices falling this year. Owe about £140k so there is roughly £200k of equity sitting there doing nothing except keeping a roof over my head.

The plan was always to downsize at 60 when I target early retirement, sell the three bed, buy a two bed outright with no mortgage, and bank whatever is left to top up the pension pot or just live off. The numbers work well at 60 because the SIPP should be accessible by then and everything slots together. But the question I keep coming back to is whether waiting eight years is costing me money if the market is flat or falling during that period. If prices drop 2% this year and say another 2% next year that is roughly £13k off the value of my place. Meanwhile the two beds I would be buying are also dropping, so the differential probably stays about the same, which means the price direction arguably does not matter if I am buying and selling in the same market.

The lifestyle bit is what I am less sure about. Three beds feels absurd for one person (no partner, no kids at home) and heating the place costs a fortune in winter, the bungalow is 1970s build with cavity walls but poor loft insulation and the EPC is a D. But I have spent nine years making it mine, the garden is decent, the neighbours are fine, and the idea of packing up and moving to some new build two bed on a development where you can hear your neighbour sneeze does not exactly fill me with excitement. Anyone done this move and honest about whether it was worth it in the end?

2

I really feel for you on this one because I’m in a similar headspace, though from a different angle. My kids left two years ago and I’m rattling around a three bed semi that I’ve been in for thirteen years. The spare rooms are basically storage at this point. Everyone keeps telling me to downsize and free up the equity, and on paper it makes total sense.

But here’s the thing nobody mentions. You don’t just lose a bedroom. You lose the garden you know, the neighbours who wave, the corner of the kitchen where the light hits at 7am. That sounds ridiculous written down but it is genuinely what stops me every time I get as far as browsing Rightmove.

The financial maths in your case sounds pretty neutral if you’re buying and selling in the same market, which I think you’ve already worked out. The real question is whether you’d actually be happier, and that’s not something a spreadsheet can answer. I’d probably wait, tbh, unless you actively dislike the place.