Overview: One step down the ladder can mean a step ahead

There comes a point in everyone's property-owning cycle when the idea of onwards and upwards has little attraction. The decision to move somewhere smaller and cheaper may not be from choice, but once someone has taken the plunge there seems to be plenty of evidence that far from looking back in regret they feel positively liberated.

There comes a point in everyone's property-owning cycle when the idea of onwards and upwards has little attraction. The decision to move somewhere smaller and cheaper may not be from choice, but once someone has taken the plunge there seems to be plenty of evidence that far from looking back in regret they feel positively liberated.

A survey last week by assertahome.com shows that a third of house hunters on the website were looking for somewhere cheaper. Of those, the largest group were downshifters looking for a better quality of life. Some 54 per cent, mostly in their mid-forties, said they had reached a point in their lives where their priorities had changed. They wanted to release cash to enjoy a more relaxing life and unburden themselves of a mortgage. That their average household income was almost £47,000, well above the national figure, suggests that their homes were likely to be of a high value as well. These are not people who fell into the categories of empty-nester, retiree or even divorcee. Rather, they were motivated by the prospect of a different lifestyle. On average, they were releasing £112,000 of equity.

Marriage breakdown is clearly a situation that will require at least one person to downsize, and in this survey divorcees comprised 15 per cent of those who responded, with an average age of 34 years. The most usual scenario was that as neither could afford to buy out the other, the family house was being sold in order to finance two less expensive properties.

Quite apart from the emotional upheaval, one imagines that the idea of stepping down the property ladder adds salt to the wound. But far from it, if the experience of a newly single friend is anything to go by. Her divorce propelled her from a family house in a leafy, popular part of London into a smaller home a few less fashionable streets away. Had she stayed married it would have been the best move they could have made, in her opinion. They could have bought the house for cash and had enough over for somewhere out of London. By searching hard for good value, she now has a nicer, more practical house in a nearby area that is still "up and coming". The problem, as she sees it, is that too many people regard such a move as a failure, not an opportunity.

Jim Buckle, managing director of assertahome.com, was surprised at the number of downsizers in the survey, but believes that people are far less driven to buy bigger and better than they used to be. "There is no reason to move if a house bought 10 years ago still suits you."

Those most likely to cash in may well have bought in areas that have seen high levels of growth. Stephen Ludlow of ludlowthompson.com says that while people are not expecting a crash, they don't believe they will continue to rise. He expects the most exclusive areas to underperform in the future, while newly fashionable areas attract people looking for value for money and good growth. Already he sees the gap beginning to close.

North narrows the gap

This is not the only gap starting to narrow. According to FPDSavills, roaring house price growth in the north is eroding the massive differential with southern property prices, so that by the autumn the difference between the two will be back to its long-term trend, which is for prices in the south to be 1.6 times higher. Since southern house prices are currently averaging £201,000, that implies an average price in the north of £125,000. The current average is £115,000.

Before southerners head north, they might need to do their sums. "Those moving out of London in search of larger homes may well be surprised by the level of values in some towns," says Richard Donnell, head of FPDSavills residential research. And he is not talking about low values.