INCREASING numbers of homeowners in Scotland are considering downsizing in the next three years as the economic crisis continues to bite.

The Bank of Scotland said that almost half (44%) of potential home-movers in Scotland are looking to buy a smaller, more affordable property in the near future.

Older people and so-called "empty nesters" whose family have left home were leading those wanting to scale back their property, the bank said, with the majority wanting a smaller home to meet their needs.

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However, reducing household bills, freeing up equity and securing funding for retirement were all cited as reasons to downsize.

Laurence Mann, head of mortgages at the Bank of Scotland, said: "Downsizers are now playing a key role in the Scottish housing market and, as the study shows, we are starting to see homeowners on different stages of the property ladder considering it as a sensible option as more and more families are look ing at ways to save money.

"While we have seen a significant rise in the potential cash windfall, downsizing can make a lot of sense for a wide range of people. It is important to consider carefully whether trading down is the best solution. Whether you are looking to lower utility bills, pay for an offspring's tuition fees, or free up extra cash for retirement, we recommend you seek professional advice before taking action."

The figures show around one-fifth (21%) of those considering downsizing are looking to do so sooner than expected, with the majority citing financial concerns as the main reason.

Many people, around one-third, said financial worries and the need to reduce household bills were driving the need to move.

One person who took part in the bank's study said: "The cost of living is making it hard to maintain this house in this location."

Estate agent Clyde Property said the figures partly reflected the "stark reality" of the country's economic situation.

A spokesman for the estate agents said: "They tell us something over and above what you might expect from empty nesters downsizing. Some homeowners choosing to move are reluctant to take on a larger loan and feel compelled to reduce their mortgage liability.

"Grim economic times force people to assess their monthly outgoings – the largest of which is usually the mortgage. And nobody knows how long this recession will drag on."

Scots who do downsize later in life can expect to pocket around 64% more than they would have a decade ago. Figures from the Bank of Scotland show those trading down from a detached house to a bungalow now earn an average of £63,811, compared with £24,948 in 2002.

Faisal Choudhry, of Savills, said: "Downsizers don't necessarily want to move to a flat; some are still buying four-bedroom homes. It may just be they can't afford to live in their £400,000 four-bedroom Victorian property anymore and are moving to a new-build four-bedroom home at half the price."