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The prospect of upcoming property tax changes in next month's Budget and beyond is creating huge uncertainty for all aspiring home-movers.
Estate agents are reporting some of the lowest transaction levels they've seen for year, as buyers and sellers sit on their hands to see how things play out.
But while this is difficult for all potential home-movers, downsizers in particular are bearing the brunt. They would be disproportionately affected by stamp duty changes or the introduction of a property tax.
But they are also among those with most to gain if stamp duty on main homes was scrapped, as pledged this week by the Conservative leader Kemi Badenoch.
Even if this Budget on November 26 does not contain harsh measures for homeowners, downsizers are already having to plan around inheritance tax changes announced in the last one.
And the best time to downsize is never defined purely by when would make the most sense financially, or from a tax perspective. Downsizers must also work out when is right for their lifestyles, family and health – a challenge made even more difficult against such an uncertain backdrop.
Here, recent downsizers share their advice on how to decide when to do it – and experts give their views on how to navigate the process and the potential changes you should consider.
What the Budget may mean for downsizers
Although not confirmed, several rumours abound about what attack the cash-strapped Chancellor Rachel Reeves could impose on the property market.
Although they would affect buyers and sellers in general, downsizers would likely be particularly affected.
One suggestion reportedly being studied by Treasury officials is a property tax charged every year on higher-value homes.
The tax was first proposed by Tim Leunig, the chief economist at the centre-Right leaning think-tank Onward.
For example, it could be 0.54 per cent of the property's value on homes priced between £500,000 and £1million, and 0.81 per cent above that.
At these levels, someone with a £600,000 home would pay an annual property tax of £540, while someone with a £1million house would fork out £2,700.
This would penalise millions of owners of family homes who have not moved for decades and who have seen the value of their properties rise over the years.
It would also disproportionately harm those with valuable properties who do not have much disposable income.
Such a tax would increase the incentive to downsize to a cheaper property. However, a possible property tax could replace stamp duty, which would be a boon for downsizers if it went ahead.
The average cost of stamp duty when moving from a median priced British home is around £13,000, according to advisers at the HomeOwners Alliance, but a more typical downsizer move – say from a £800,000 property to a £500,000 home – would cost £30,691.
This week Ms Badenoch announced that the Tory Party would scrap stamp duty on main homes, which would save millions of downsizers tens of thousands of pounds.
However, it could be 2029 before the next General Election and there is no guarantee such a plan would go ahead, so those hoping to downsize soon may not wish to hold out.
Hefty stamp duty rates are a heavy financial disincentive to downsizing.
Research this summer from English Housing Survey and estate agent Jackson-Stops found that 15 per cent more prospective downsizers said they would move within a year if stamp duty was removed or reduced on their onward purchase.
Another highly controversial plan mooted is to charge people capital gains tax if they sell their home for more than £1.5 million.
Again, this would particularly harm couples who have climbed the property ladder and are living in their most expensive home before downsizing.
But downsizers face changes regardless
Regardless of what the forthcoming Budget contains, there are already changes ahead that will affect downsizers.
Pensions will form part of estates for inheritance tax purposes from April 2027, the Chancellor announced in last year's Budget.
At present they are not considered part of your estate so can be passed on free of inheritance tax.
Once the change kicks in, the number of families caught in the inheritance tax net is set to soar.
Financial advisers report that many are considering what to do to mitigate against this.
One option is to pass on wealth to loved ones during your lifetime.
All gifts are free of inheritance tax so long as you live for seven years after making them.
If you die within seven years, the tax rate is tapered from the full 40 per cent depending on how many years after making the gift you survive.
Claire Carter, country house manager at estate agent John D Wood, says: 'Owners are debating whether to sell up now or wait until after the Budget.
'They are worried about changes to capital gains tax and council tax banding that might come. Many are asset-rich but cash-poor.
'Some have decided to downsize and make gifts to reduce the risk of huge inheritance bills – so they will release cash to pay school fees for their grandchildren, or home deposits or their children's home extensions.'
It is not easy to cut an inheritance tax bill on your home if you are living in it – there are options but none are straightforward.
However, by downsizing you can free up capital that is easy to gift and is free of inheritance tax if you live for seven years.
There has been speculation that the seven year rule could be extended to ten years, which would further increase the incentive for some to set the clock ticking.
Pete Fairchild, head of private clients at financial advisers Crowe, says that he is advising people trying to downsize to crack on with it because some tax changes could come into force immediately – just as capital gains tax was increased overnight following last year's Budget.
'At least downsizers can start the seven-year clock going to reduce inheritance tax – although that might change to ten years,' he says.
However, although inheritance tax is a consideration for many, it rarely makes sense for it to trump other considerations.
Finding the right living arrangement for you is key – even if it does lead to a higher bill.
Retired medical laboratory officers Elizabeth and Roy, both in their late 70s, have decided to upsize in retirement by buying a new-build home that is easier to manage than their last property – plus buying a holiday home for them to enjoy.
Inheritance tax was not a consideration. 'It's not our problem,' says Elizabeth.
The couple are delighted with their low-upkeep new home with a small, peaceful garden overlooking a forest – but it was second time lucky for them.
They sold their five-bedroom home in Newdigate village, near Dorking in Surrey, and now live in a five-bedroom house which they bought off-plan at developer Berkeley's Abbey Barn Park in High Wycombe, Buckinghamshire.
Plus, they are enjoying their three-bedroom flat in Swanage, Dorset, for holidays.
'It was an emotional and massive process, but after 18 months now we enjoy it and like being near family,' says Elizabeth, who has three grown-up children as well as three grandchildren.
Downsizing could take longer than you think
An already sluggish property market has slowed ahead of the Budget, so finding the right place to move to might take longer than usual.
The average time for a home to find a buyer was 77 days in September, according to property website Rightmove, up from 62 days last year.
At the higher end of the market – prime downsizer territory – and in London in particular, the average time taken to sell is more than 300 days.
Finding somewhere that is right for you can often take a while, so it can be worth starting before you are ready to move.
Former fashion editor Sue Sherwood and her husband Rob saw 150 properties before they found their perfect downsized home.
The couple loved their four-bedroom converted barn in Long Itchington, near Royal Leamington Spa, Warwickshire, but one of their four adult children suggested they move closer to shops, cafes and amenities.
'We enjoyed that house for 20 years and had great neighbours, but a whole floor was never used, so we downsized,' says Sue, 80.
Their home sold very quickly in 2022, yet finding a new house took 18 months.
'We has thought that finding a three-bedroom house in the Cotswolds within walking distance of a gastropub, shops and a doctor's surgery would be easy,' says Sue.
They ended up staying with one of their sons, until he found the right property for them in March last year. It's in a development, by Backhouse, of 67 contemporary-style new homes in Moreton-in-Marsh, Gloucestershire.
'It's perfect and I've started book, wine, theatre and cinema clubs,' says Sue, who says they are the oldest residents.
Take the pressure off and rent instead
If you're ready to downsize but are not quite sure what is right for you, renting instead can be a good compromise.
Karen King-Wilson wanted to downsize, but after seeing 50 properties still could not find what she wanted.
So she sold her six-bedroom Sussex farmhouse on six acres in March and is now renting a cottage in Ovington, near Winchester, Hampshire.
'I've landed in the right place. If I had bought in the wrong place it would have been an expensive mistake to undo, so renting can be a brilliant idea,' says Karen, 73, who has run a pub, travel business and worked in financial services.
'I've met lots of great locals already through helping with the summer fete, yoga and petanque.'
Karen has now found a two-up-two-down cottage in nearby Easton and is moving in next month.
'After my husband died I thought I wanted to hide away in solitude in a larger property, yet a small house forces me to get out and create a new life,' she adds.
Don't wait for the 'perfect' time to move
It may be tempting to wait for the perfect market and tax conditions, but sometimes it makes sense to move when it's right for you.
Roy and Movita Naylor swapped their four-bedroom home in the Lake District for a new-build home half an hour from their 57-year-old son, plus their grandchildren and great-grandchildren.
In February they moved to a three-bedroom house on builder Redrow's Worden Gardens development, in Leyland, Lancashire, where four-bed homes cost from £375,000.
Movita, 79, a former nurse, says: 'If we had left it any longer to move it would have been harder both mentally and physically. It was the right decision at the right time.'
Roy, 82, a retired engineer, adds: 'The family wanted us closer to them and nearer things like the GP and on a bus route. Despite one or two tiffs along the way, we managed it all ourselves.'
Are you downsizing or have you been putting it off? money@mailonsunday.co.uk