Who still rents in their 40’s/50’s- What is your plan?

[Myhouseismyprison]

I live in the South East, for various reasons we have never managed to purchase our own home.

I am now in my late 40’s and DH is 50. We still have children at home who all have their lives here so unable to pick up and move somewhere cheaper just yet.

We have some savings but nowhere near enough to buy here for the house size we would need. We have rented the same house for several years but know this can change quickly and have no idea how we would afford current market rent.

I just wondered what plans people had in place for retirement? What savings accounts would be good?

how long a mortgage?
a mortgage until you are 90?

You can get a mortgage into retirement, providing you can demonstrate having an adequate income to repay it i.e. a private pension, or investments to cash.

a mortgage once retired sounds so depressing

Not if you're wealthy, but very few of us will ever be.

If you weren’t in a position to buy when younger and the alternative to a mortgage into retirement is renting in retirement, there’s not really a lot of difference except that the former offers greater security of tenure.

We only managed to buy a few years ago aged 40 after MIL gofted us a decent deposit following an inheritance. We managed to buy a 4 bed, its in the old council estate side of town but most are now privately owned and in even the very worst parts of our very small town are probably better than the best parts of many cities!

i think we would look to stay here forever really as its not too big to manage as we get older and although we couldnprobably now upgrade to a detached rather than end terrace in the ‘nice’ side of town we would have to up our mortgage payments and be paying u til we were at least 70. Kids are mid to late teens to we dont need more space.

i dont think so @ComtesseDeSpair
you have the cost of maintenance
a new roof etc.,
new boiler etc., all this on top of mortgage repayments
definitely needs professional advice and not to be done on a whim or mumsnet opinion

The trouble with flats is the service charges - they can run into the thousands every year.

Buying a flat seems like the cheaper option, but it really isn’t when you look at all the costs involved. I would never buy a flat.

I'm 53 and partner 63. No savings and rent. Will never be able to buy a home and if my mother goes into a home no inheritance. If she doesn't it will only be approx £130k. We will have to rent forever (nigh on impossible on expected pensions and a dog). Shared ownership will probably be too expensive too. Landlord called last week and put up rent very slightly and warned us in three years they will be expecting to sell. I have no idea where we will end up. It keeps me awake at night. I never saw this in my future.

It is if you live in London as commuting from outside London would cost 5k each..10k in total for 2. Service charges of 1900 per annum for our residents managed block isn't large in comparison plus my dh can cycle to work so its free for him and around £150 quid a month for me. We live in zone 3 plus we dont have a car. Even at 2% interest rates in 2019 it was cheaper given many houses in SE were actually more than even a flat in zone 3 London. It must be crazy now at 4% interest rates and more RTO mandates and higher rail costs. Also things like train delays could hike childcare bill up considerably or mean one partner has to go part time or do a local job.

If your partner is over 60 you will qualify to apply for sheltered housing. Do it now don't wait for your landlord to sell up.
That way you can either get a council or housing association flat. Life time tenancy and more reasonable rent, a lot more secure as you get older.
I was told by a housing officer average wait for sheltered accommodation is 12 to 18 months. Sheltered accommodation can only go to people over a certain age so it's a lot quicker.

There are a number of "over 55" type homes available to buy in my area. They are typically about 2/3 of market value and 1 bed flats. I haven't looked into them as an option as I'm thinking "what's the catch?" and also have dependent adult children (dependent because they are currently studying and come home when term is finished). There is usually a statement about no pets but I don't know how enforceable that would be.

Council housing is minimal in my area as are HA properties. When I joined the housing register around 10 years ago, I was informed it was a 10 year wait and that the housing department were keen to add more privately owned but socially let rentals to their list. That was before Covid and the squeeze on private rental so it's likely to have gone up. This may be different for over 60s but possibly these are also squeezed.

There are also 2 new trends over the last few years (apart from rise of AirBnB in my seaside tourist area). The first is a firm offering shared ownership type scheme for selected established houses. They advertise on estate agents' websites alongside the full market price. This may be some kind of equity release scheme but one wonders how much power you have in taking on such a property. The other is first time buyer homes going straight to auction for cash buyers. Not sure what is behind that trend.

There is a ten year age gap there. If the older partner dies while in sheltered housing does the younger partner then get the boot

I was honestly really surprised that my brother in law got a housing association flat so quickly. He's over 55 but has a few health issues he got offered a flat after 4 months.
The housing officer I spoke to on his behalf said over 60s is relatively quick is they will look at sheltered accommodation. She said normal council housing would be 10 to 15 years.

Thank you for your reply. Yes I will get on that straight away. We both work full time but poorly paid jobs. We have been very fortunate to pay under market value for the house for ten years, the landlord knows we are good tenants and has been very kind, but all good things come to an end!

We are 72 and 74, been renting a council house for 15 years. Eldest daughter 43 her DH 53 they rent a council flat. All of us in London boroughs. Youngest daughter lives in a 4 bed town house new build in the East Midlands. Her mortgage is less that our rent. As they say location location location.

I got 45% discount for a 15 year tenancy, which according to the link, I would get now with the same time as a tenant.

I've always wondered what renters do as they approach retirement, is it a case of downsizing or applying for social housing? It's probably a privileged position but I don't know any relatives who have retired without owning a house, it must make retirement difficult unless the pension is good

I guess the same as people who do not expect to have a paid off mortgage by retirement. They just have to keep paying housing costs. I will still have a mortgage when I retire.

It’s the reality for a lot of us. I will be at least 50 before I am able to get on the housing ladder. That means a mortgage at retirement.

it’s going to be a ticking time bomb for many, previously the few that rented would find suitable HA properties or sheltered accommodation. It won’t be available in the volume needed in the next 20-30 years.

You probably don’t have a good pension when you rent as you’d have probably been able to buy if you were putting that much into a pension.

and downsizing doesn’t work when you’ve never really upsized in the first place because rents are always increasing. So we started renting at £1000 a month for a house. Now £1000 a month gets me a static caravan on a site. downsizing to a one bed flat would save me probably £300 a month, granted a bit more on bills etc. but it’s not like downsizing as an owner. You don’t make substantial savings

I guess, just downsizing as well if it becomes too hard. My PIL have just finished their mortgage at the age of 79, but they'd kept moving up the ladder and could have come down if they chose to. I'm lucky that my mortgage is paid off (I'm 47) but I only have a tiny house and might take out another one at some point

If they have a big house definitely it is an option. For me I won’t really be able to downsize as my property will have to be tiny when I purchase it

The government is returning maximum cash discounts to their pre-2012 levels of between £16,000 and £38,000.

E.g. so if your council house is worth £200K (lower than the UK average), you won't get a 45% discount (£90K).

Hi, I've seen your posts and thought you might find this useful
https://www.thisismoney.co.uk/money/pensions/article-13793109/Permanently-disabled-NI-credits-state-pension.html

I know its soul destroying, but the ESA process is very, very different to PIP and it sounds like you have enough years left to accrue the max NI years for full state pension for yourself