Suffolk Building Society’s recent research has revealed that downsizing isn’t limited to older people. Indeed, with the cost- of-living crisis still very much in people’s minds, younger and middle-aged homeowners are also considering this route.

As a rule, the property market is very much focused on moving up the ladder but there is less discussion to help people navigate their way down. Of course, downsizing doesn’t always mean being mortgage-free. With the age of first-time buyers (FTB) increasing, downsizing with a mortgage is likely to become more commonplace in the future. Therefore, brokers should look to keep dialogue open with their clients at every life stage.

There is a wide range of circumstances that might lead to downsizing, which can include changes to the family dynamic, such as children leaving home, or a couple divorcing. It could simply be a move to a new (better serviced) area, to be nearer family or closer to the coast. It may also be a smaller residence is required in favour of splitting time between two locations, such as the main family home and a holiday property.

Some of these factors may lead to the homeowner(s) moving to a location where property prices are more expensive and therefore they will be downsizing in property size but not necessarily in mortgage terms.

Whatever the reason or cause, it’s clear that downsizers should not be stereotyped – and moving to a smaller home could be on the cards for people of all ages, at all stages of life.

Getting into the client’s mindset is important. While moving up the property ladder, many people will associate a broker with helping them maximise their borrowing ability; however, they may not realise that similar advice should still be sought when downsizing.

Let’s look at the different client types that need advice without often realising it.

The ‘been there and bought the t-shirt’ client

They have previously owned a property (or possibly several), so may well think they know enough to go it alone. However, as we all know, the market moves rapidly, so even the most experienced buyer would still benefit from a knowledgeable broker who is up to date on lenders’ offerings.

The ‘banking a lump sum’ client

Downsizing is not cost-free; buyers may offset moving bills against selling a larger property, but getting the best deal and planning for the total house-moving bill also needs consideration, especially if it is being undertaken primarily for financial reasons.

Helping a client understand their total move costs is often much-welcomed, even if they are hoping to save a lump sum after the move. Look after the pennies and the pounds will look after themselves!

The ‘standard residential’ client

They may be familiar with a standard resi mortgage, but perhaps this client may now benefit from looking at other features and product types.

Most clients will be familiar with capital & interest and interest-only products but the middle ground of a part-and-part mortgage may benefit some clients in this situation, but many will be unfamiliar with this type of borrowing.

Similarly, changing the mortgage term can lower the balance, possibly allowing a client to pay more each month, thereby enabling them to pay off their mortgage more quickly.

Flexible products can offer further benefits, such as offset mortgages lowering a client’s monthly payments.

And products with no early repayment charges, and/or larger overpayment facilities may be more beneficial to specific borrowers. However, without good advice from a broker, they may fail to take advantage of the features most suited to their needs.

The ‘change in circumstances’ client

Affordability isn’t just an issue on the way ‘up’ the property ladder. Many issues can arise and affect downsizers at other times, such as changing jobs, financial settlements after divorce, claiming a pension or a loss of assets. As a result, people may need to look at their finances differently – and a broker will know what different lenders will consider.

The ‘small loan so my spending won’t matter’ client

This applies whether someone is a first-time buyer, experienced buyer or downsizer. Criteria and affordability are important – even if someone is borrowing less than they already have on a current mortgage. Consequently, lenders need to factor in all types of expenses, including school fees, maintenance, and significant financial commitments (such as campervans, holiday homes and the associated costs).

The ‘change of property type’ client

A broker will also know what property types are considered by different lenders, so if the downsized property has any unusual features, unusual type(s) of construction, or is near commercial properties, it’s important to find a provider who is happy to lend.

Even buying a second home many have certain mortgage restrictions of which the client may be unaware. A client who has lived in a standard four-bedroom home for most of their life, may not even realise such criteria exist!

The ‘commission will be too small for a broker’ client

Some clients may also believe they are now too small or not important enough to bother a broker. Although it’s not quite a ‘cradle to grave’ relationship, looking after a client from their first home to their last can be extremely rewarding.

There is also an intergenerational element here: being seen to provide comprehensive advice to parents and grandparents may mean that children and grandchildren follow suit for mortgage advice at a later date.

The ‘never used or needed a broker before’ client

For homeowners in later life now considering downsizing, the process of securing a mortgage may have evolved considerably since they first did so. With changing times and varying personal circumstances – such as different income types, stricter affordability checks, and diverse lender criteria – it’s crucial to ensure they’re getting the best mortgage their circumstances allow.

As people progress through different life stages, the need for expert support becomes more apparent. While they might have previously handled the research on their own, now they may need to consult a mortgage broker who can navigate the current market and help secure the most suitable deal.

So, brokers know they are best placed to support downsizers during their move, although their clients may not. By being aware of these mindsets, brokers will be in the best position to maintain a relationship with the clients – whether they are downsizing due to age, or any other factors.

Charlotte Grimshaw is head of intermediary relations and mortgage sales at Suffolk Building Society