A relative has a 4 bed semi detatched, large garden and garage in a really nice location.
Would he be better:
A) keeping hold of it and downsizing in 20 years?
B) moving to a much smaller house as near to the area he's in now, leaving him mortgage free and able to maybe buy another small property to rent out, thus bringing in some income and help with his pension in later life?

He's finding it difficult to keep his present house. In doing so he's had to give up holidays and like many people at the moment is doing 'without'. However he can manage at a pinch.

Downsizing now would take him away from the area he loves, fantastic neighbours, friends etc. but would free up some money to have a bit of a life.
It's taken him years of hard work to get this house and he's loath to give it up, having been in a tiny place with really bad neighbours, noise, pollution etc.

just to throw it in the mix: does the garden have potential as infill development in the future? Access and scale?

he should rent it out and rent/buy somewhere smaller in the same location.

Or…

If its in a place that is popular with holiday makers then he should consider living there during the winter months and renting it on a weekly basis through the spring/summer.

A mate of mine does this and pisses off down the Danube on a longboat for 6 months of the year every summer whilst making £800 a week off people on their hols.

edit – should add that he is in his sixties and was in a similar sounding situation as your relative. Best thing he ever did apparently.

No.
In my book it's a small garden, but around his way the estate agents call it big. Probably under 10th of an acre all in.

I'll let him read all this at a later date.

Thanks.

I would sell up and be mortgage free, don't see the point in struggling if you don't have too.

Factor in selling current house, buying new house and buying rental house costs as they mount up and people often forget that. Oh and tax on any rental income (not sure figures).

Can he rent out one or two rooms? Can bring in a nice chunk of money if you don't mind sharing (upto £4,250 tax free).

Check out http://www.moneysavingexpert.com as there are loads of hints/tips on there and a good forum.

All well and good planning for old age but if you can't live now there's no point in planning to have enough money to live later when you're too old to enjoy it.

Struggling ain't fun if there's little chance of increase income sometime soon. Rent out a room? I stretched myself in my early years and had a lodger to help; worked out well for me but stopped when I got married.

Selling a big house at/near the bottom of the market to move to a smaller one in a worse location or living mortgage free is a difficult one.

The cost of moving is not cheap and will living in a smaller house work for him especially if the location is not as nice ?

If it were me i would look at the mortgage on the current home to see if it can be made cheaper, possibly convert from capital repayment to interest only for a while till things get easier, assuming he's not interest only already. If he's on a high fixed rate is it worth him paying any penalties to get a cheaper interest rate or if on a variable rate can he get a cheaper deal (some lenders SVR's are still above 4% where as some new tracker deals are below 2% dependent on circumstances)

Can he make other savings in his life style to make things easier for him, he's gone without holidays but has he got sky, gym memberships etc that could be cancelled.

If he's happy where he lives then it should be worth the sacrifice but its a very difficult one to call.

Which would he like on his grave stone:

"He lived in a really nice house."

or

"He lived his life to the full."

If he's struggling now he's going to lose his home within the next 2 years unless he gets a substantial pay rise. Factor in council tax, utility, etc, increases above inflation, then consider the fact interest rates have never been so low and will most definitley be increasing in the next 6 months, then add the general cost of living that increases year on year above what most people get as a yearly rise, and finally think about how much our taxes are going to have to rise to fill the hole labour has got us into.

Selling may not be a good option either, I dont know wher this pile of codswallop is coming from that property prices are increasing, they're certainly stabilising and homes are selling again (in the right areas).

Then again I may be totally wrong and there may be some financial optimism ahead.

I think a lot of how the property market is going to go will be very variable depending on area and point in the market. round here there is definitely a good demand for cheaper properties and the top of the market but perhaps not the middle of the market. Prices are certainly rising here.

In the position described I would be looking for a house to downsize into – but take my time to find the right property in the right area – no hurry over it.

spareroom.co.uk
Can start with Mon-Fri only (< 430 pcm I think is tax free), plenty of away from home workers.

ie I wouldn't sell now. (ie it should [eventually/maybe] rise more than smaller props),liking where you live and neighbours is a BIG ++++ and most certainly not always how it happens, add up moving costs, add up risk of new proprty working out so well.

This is a low risk option (interview prospects, get references, take a photo, get a photocopy of passport etc etc, impacts house insurance), which can be dropped at a months notice.