Almost a quarter of all homemovers downsized last year, pushed by record energy bills and rising energy costs, data from Reallymoving shows.  

Downsizers made up 17% of all movers last January, rising steadily throughout the year to account for 24% of all moves by December, says the homemoving website.   

Households that downsize are defined as those moving to a home with fewer bedrooms than the one they are selling.  

The report says: “While homeowners have historically chosen to remain in family homes for as long as possible to avoid the cost of moving and stamp duty bills, record energy prices and inflationary pressures are encouraging them to reassess.”  

Inflation is currently 10.5%, a near 40-year high, while electricity prices in the UK rose by 65% and gas prices by 129% last year, according to the Office for National Statistics.  

The homemoving firm’s report says: “With 8.2 million homeowners living in under-occupied homes with at least two spare bedrooms, according to the latest English Housing Survey, there’s significant scope among older homeowners, particularly retirees who are more likely to be on a fixed income, to reduce their monthly outgoings by moving to a smaller, more energy-efficient home.”   

Downsizers on average released 18% of their equity by moving to a smaller home, amounting to £86,000, selling a property for £481,000 and buying for 395,000.   

The regions where movers released the greatest equity were Wales and Scotland, at 24%, freeing cash lumps sums of £75,000 and £65,000 respectively. This was followed by the South East, where downsizers typically released 21% of their property’s value.    

However, downsizers in London and the South East benefitted from the largest lump sums — both posting gains of £115,000 on average — followed by the East of England, £82,000, and the East Midlands and Scotland both gaining £65,000.    

The survey adds that people are moving further afield than before the pandemic.   

The median distance moved was nine miles and the mean was 51 miles, in 2019. But last year, the median distance moved lifted to 14 miles while the mean jumped to 66 miles.   

Reallymoving chief executive Rob Houghton, says: “The significant increase in downsizing activity over the last twelve months is likely to continue throughout 2023, as homeowners seek to release cash from their homes to help them through the current crisis.   

“Many older homeowners have paid off the mortgage on their family home but may still be struggling to deal with the rising cost of living, especially if they’re retired and on a fixed income, and the end of the energy price guarantee is approaching in April.   

“Following strong price gains over the last few years, moving to a smaller home will give most people a good chunk of cash and put them in a very strong position to negotiate a favourable price on their next home, perhaps as a cash buyer.   

“It could also boost their pension pot, enable them to help family members financially or take care of large one-off purchases such as a new car.  

“For years an ageing homeowning population has been generally reluctant to downsize, putting greater pressure on demand for larger family homes needed by younger generations.

“More of these properties changing hands is a good thing for the health of the housing market and the wider economy, as some of the vast equity locked into property for decades is finally released.”  

Reallymoving says its data is based on around 55,000 conveyancing registrations.