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For many people in their fifties, sixties, and beyond, downsizing feels like the natural next step.
The children have left home, the family house feels too big to manage, and releasing some property wealth could help make retirement more comfortable. But while the idea is appealing, the reality often proves much trickier, with research suggesting that 1.2m homeowners over 55 have had to put their downsizing plans on hold.
One in seven people in this age group have decided not to downsize in the past two years, according to research by the HomeOwners Alliance, despite initially planning a move. If you’re currently undecided about downsizing, read our article Five questions to ask yourself if you’re considering downsizing your home.
Almost half (41%) of homeowners aged 55 or more said that the stress of moving put them off actually proceeding with their plans, while more than a third (34%) cited a shortage of suitable properties to move to as a barrier. A further 23% said they’d decided not to downsize because they didn’t want to move away from their friends and neighbours. Cost is also an issue, with steep house prices and moving costs deterring 23% and 24% of homeowners respectively.
Paula Higgins, chief executive of HomeOwners Alliance said: “No one wants to make their life more stressful and as we age the prospect of a house move can be overwhelming. Buying and selling a home is too uncertain, takes too long, and is too expensive.”
Here, we delve deeper into some of the reasons growing numbers of over-55s are deciding to stay put, and look at some of the options for those who have ruled out a move but still need to free up some money to cover retirement costs.
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Bungalow shortage
Recent years have seen a dramatic decline in bungalow construction, despite the fact that this type of property often appeals to homeowners looking to downsize to a more practical option.
Nearly four out of 10 (38%) aged 55+ said they would prefer a bungalow for their next move, making bungalows the most popular property choice among this group. However, builders are turning away from them, with data from the National House Building Council showing that although they made up 11% of new homes in 1990, this had fallen to just 1% by 2024.
Ms Higgins said: “Our research shows that too many older homeowners feel stuck in homes that no longer work for them but struggle to find an appropriate alternative. There is a huge demand for bungalows but hardly any get built anymore. With the UK’s rapidly ageing population, we hope the government’s long-promised housing strategy looks at a better range of retirement housing, including single-storey solutions.”
Cost and stress of moving
The cost of moving house can be exorbitant. Separate analysis by the HomeOwners Alliance found that in 2025, the average cost of moving is £13,018 based on buying and selling an averagely priced house in the UK of £292,000.
This includes Stamp Duty, conveyancing, estate agent fees, survey costs and mortgage fees, removals, and mail redirection.
Of course, these costs can be higher or lower depending on the value of your property and whether you are just buying, just selling or buying and selling.
It’s not just moving costs that often deter homeowners from moving. The actual process of selling and buying can be hugely stressful – and that’s if it happens at all. According to property insights and analytics company, Outra, over 1 in 7 (15%) property sales fell through on average between January and July 2025 alone.
This equates to just over 111,000 total fall-throughs among nearly 710,000 sales in the UK over that time period. Simon Dawson, Chief Revenue Officer at Outra said: “Selling your home is often far more stressful than it should be, and your sale falling through is the ultimate headache.
“A fallen-through sale costs you time and money, whether it’s having to go another round with your solicitor or estate agent or cancelling moving plans you’d already made. You could also end up high and dry if you’re relying on this sale to buy your next property – a broken chain could cost you your new home, as well as leaving you stuck with the old one.”
Options if you’ve ruled out a move
Around 28% of homeowners in the UK plan to use the equity in their home as a retirement fund, according to analysis by annuity comparison service Annuity Ready, but may find their plans scuppered if they can’t find anywhere suitable to move to, or simply can’t face a move. So what are the options if you’ve decided to stay put?
Equity release
If you can’t find a suitable home to move to, or don’t want the stress or upheaval of selling up, then equity release may be one option to consider – although whether it is right for you will very much depend on your individual circumstances.
Equity release is essentially a type of mortgage product that’s designed to provide you with a lump sum or regular payments from the equity in your home, but without the need to make monthly repayments. Instead, the interest you owe instead rolls up over the years, and it’s typically only repaid, along with the amount you originally released, when you die or go into long-term care and the property is sold.
Once you’ve released equity from your property, you can continue to live in your home, so you don’t have to face the upheaval and stress involved in downsizing. You can find out more about how equity release works in our guide Equity release – what is it and how does it work?
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If you’re considering releasing equity from your home, Rest Less members can book a free consultation from Fidelius. Speak with a qualified, FCA-regulated financial adviser you can trust. Rated 4.7/5 on VouchedFor from over 2,600 reviews.
Bear in mind that releasing equity from your property might prevent you from moving home or downsizing in future. That’s because if you’ve released equity from your home and then sell, you’ll probably face charges if you want to use the proceeds to pay back what you owe.
However, you might be able to get ‘downsizing protection’ from your equity release provider, so you can repay the plan in full without paying an early repayment charge. Don’t forget that your plans may change in the future even if you’re not wanting to move now, so it’s important to factor this in when taking out an equity release plan. Find out more in our article Is equity release right for me?
Renting out a room
If you’re reluctant to use equity release, then another way you might be able to use your home to boost your retirement income is by renting out a spare room, if you have one.
Under the government’s Rent a Room scheme, you can let out a furnished room in your home to a lodger and not pay any tax on the income you get from them, so long as this income doesn’t exceed £7,500. Learn more in our guide Renting out a room – What you need to know.
A final thought
Downsizing can be a great way to simplify life and free up extra cash, but it’s often not as straightforward as many people hope.
A shortage of suitable homes, high costs, and the emotional pull of staying put all play their part in holding people back. If you’re weighing up your own options, it’s worth looking carefully at the alternatives – whether that’s equity release, renting out a room, or simply making small changes to make your current home work better for you. The most important thing is finding a solution that supports both your financial security and your peace of mind in later life.
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