You may have started to notice that the street you’ve lived on for many years is peppered with ‘FOR SALE’ signs. The neighbours you’ve lived beside through changing seasons and growing children are, one by one, beginning to downsize their homes, perhaps moving to the quieter, country corner of where you live.
Selling the family home for something smaller and cheaper has its merits, of course, but when should you move out of yours? In fact, should you move out of it at all? And where would you consider moving, if you had the option?
One of the most common reasons for selling the family home is to release equity from it. Downsizing for something cheaper will line your bank account for whatever you want to do with it: whether you spend it, invest it, tuck it away for your pension, go travelling around the world or buy a second property to generate a buy-to-let income. Read up on the tax and property investment rules (the Money Advice Service would be a good place to start) or talk to a financial advisor. With careful planning, selling the family home could provide you with financial freedom and plenty of options for your future.
It’s becoming increasingly common for parents to contribute towards a deposit for their child’s first property, and selling the family home is a simple way to release equity your family could use. Just think carefully about how you do this if this is one of the reasons you’re considering selling up.
For instance, do you want a share in the property? If so, make that clear, or have a conversation about the money being a gift instead. Also, your feelings towards your child’s partner is something else to consider if you’re thinking of selling the family home in order to help your children onto the property ladder. If your child is buying with their spouse or partner, you’ll need to have reached an agreement about what happens in the event of your child’s relationship breaking down. Will the portion you contributed be paid back to you, or will it be divided between the couple as they see fit, for example?
Another reason many people decide to sell up is to move into a property that’s smaller, cheaper to heat and easier to maintain. After all, if you have empty bedrooms, spare reception rooms and a garden that requires lots of work, downsizing to relieve responsibility is an attractive option. And, while you might feel too young to move into a bungalow, or a cottage in the sticks, and spend the next few decades investing your money into a property with manageable outside space, a good layout and rooms that could be adapted in the future is a sensible thing to consider doing.
If you’ve ever fantasised about travelling around the world, or just seeing what life is like in a different country, selling the family home could be a way to make your dream a reality. Selling your property could free up money to spend on your travels, and relinquishes the need to somehow maintain a home that no-one’s living in. Of course you could always rent out the family home, but there’s something liberating about selling up instead. You’ll be able to get rid of the furniture and do away with the unnecessary stuff you’ve acquired over the years, and not need to worry about acting as a landlord from afar or dealing with letting agencies and income tax.
When all is said and done, many people see selling the family home as just another life experience. It feels as monumental as signing a deal for the first home you bought, but it’s something that’s simply part and parcel of dealing with property. We rent, we buy, we sell – and while there’s room for sentimentality, it can’t be a decisive factor in financial decisions or those that affect the nature or quality of your life.
While all of the above is true, of the most important things you need to consider when contemplating selling the family home is the property market.
With Brexit looming on the horizon and uncertainty about the way the market will respond, now might not be the best time to sell the family home. To ensure you get the best possible price for a home that likely means a great deal to you, consider holding off until you’re confident you’re going to be offered a price that represents what it’s worth.
That said, don’t hold on for a sky-high asking price. To you, the house is a family home containing precious memories, but to a buyer, it’s just a property - and a potentially over-valued one at that. Be realistic about the asking price you can command.
Another factor to consider is the amount of cash that will be sitting in your bank account if you downsize the family home for something smaller or cheaper. Not all savings are tax-free, and once equity is released from your home into your bank account, it might be worth talking to a financial advisor about how best to manage your assets.
However, don’t forget to give some thought to the money you might be about to inherit too. Many people who are of an age to consider selling the family home also have elderly parents, and their estate is something you need to factor into your financial planning.
Another reason it may not be the right time to move out of your family home is if you don’t feel ready to let go of it yourself. It’s likely to be a difficult thing to do even if you do feel ready, but you need to be prepared to lock that front door forever, handing the keys over to a new occupant without feeling a strong sense of loss. Having a new chapter to look forward to will cushion the impact of selling the family home, but do spend some time evaluating your emotions and what’s going on in your life right now.
Another consideration to bear in mind is how your children may feel about you selling the family home. Of course, your decision shouldn’t be made solely (if indeed at all) with regard to your children’s feelings. After all, with homes of their own (hopefully) or at least the age and independence to provide for themselves, your children can’t expect you to keep their childhood home forever.
However, the reality is that even adult children with their own offspring feel strong emotional attachments to the family home. If you’ve lived in your home for a long time, or your children have particularly happy memories in the property, your children may find a sale hard to come to terms with. In many cases, children want the place they grew up in to be preserved in time, or at least be a place that’s accessible if they want to retreat from the world. Talk to your children about your plans once you think you’ve made a decision, and think about where family get-togethers may take place in the future. Can you meet for Sunday lunch at your child’s house, for instance?
‘Boomerang’ children (that is, those who return to the family home after leaving) will need to be carefully considered in your plans. If you’re the sort of parent who considers it their duty to provide their child with a place to live, regardless of your child’s age or circumstances, a ‘boomerang’ child will certainly make you think twice about selling up.
For instance, if you know your child is in an unhappy relationship or in a precarious position with their employment, you may want to hold off on selling your house for now. But, it’s not just children bouncing back to the family home once relationships have broken down that you might want to account for. Children that haven’t yet graduated from university are another factor to consider, as Paul McCormick and Mary Jane Amies know full well.
“We’ve lived in our five-bedroom home for 15 years with our four children” Mary Jane explains. “Our eldest two are currently still living here while they’re saving up to buy their first homes, and our daughter’s boyfriend lives with us too,” she explains.
“We thought about downsizing last year, but we’re mindful that our second-youngest may want to come home at some point, if only for a short while he’s in-between houses”.
“And, our youngest is only in his first year of University,” the couple add. “We know he’ll be coming home in the holidays, and we want to be able to offer our youngest two children the same opportunities we’ve given our eldest two – a room while they save up a deposit so they can get on the property ladder”.
Paul and Mary Jane explain that, even after viewing some properties and having their family home valued, staying where they are makes sense for now. While their house is only half-full for most of the year, having the option of supporting their children equally is a priority for them right now.
Ultimately, selling the family home is not a decision to take lightly. You’ll need to weigh up financial implications of selling, know where you’re heading, and be comfortable with surrendering the property to someone else. But, if you’ve decided it’s the right thing to do, selling your family home could be the beginning of an exciting new chapter. Who knows what the future has in store?