To think more people should be incentivised to downsize?

[Sprockerdilerock]

I'm sure I will be flamed but here goes.

I know so many older adults who live in family size homes long after their children have left. Would it not be better for the government to offer incentives eg no stamp duty, removal costs paid for them to downsize to free them up for those that need them more?

We do have a housing shortage and I get that we could always build more homes, but we are also heading towards a climate crisis and surely it's better to use what resources we do have more efficiently and plough less energy into creating more.

My MIL is case in point - she still lives in the home my DH and his siblings grew up and often expresses a wish to downsize but she doesn't have a lot of money to spend on things like legal costs etc.

I'd have thought it would be more space and resource efficient to build additional batches of smaller homes than additional larger ones?

Competition for 3/4 bed houses here is still quiet fierce despite the new build estates popping up.

@Toilenstripes I guess we will never agree there. I'm not of the opinion that the climate crisis can be solved unless there is more government meddling into private affairs. I'm sure that makes me unpopular!

I suppose what you class a big is relevant. I live in a 4 bed terrace, wouldn't class that as big.

Living in large houses isn't an issue.

There is a shortage of affordable houses because they are an investment for landlords and there's no affordable housing for first time buyers.

Other issue is buying to make a profit. But a house, do it up, then it's unaffordable.

My aunt has only recently downsized despite having wanted to move for the past 20 years. Her husband was in a care home and if she sold the house the council would take his half to pay his care costs, leaving her with only half the value of the house, which was not enough to buy a replacement property. So she had to stay put. She couldn’t get up the stairs so she was living downstairs and getting washed in the kitchen. He died recently and she was finally able to sell without having to give away half of the proceeds. She’s moved to a nice little bungalow (which cost about the same as what her house was worth).

It's called the housing ladder for a reason I guess. People start at the bottom in flats and small houses then go up the ladder as their salary/family/equity/needs increase.

If people start coming down the ladder then it stops others going up the ladder. You will then have a lot of older people/couples buying the 1 or 2 bed homes which mean it's more difficult for people to get on the ladder in the first place (it's already hard enough). They will also have the advantage of being a cash buyer as, in a lot of cases, they have paid their mortgage off. So, not only will there be fewer starter homes (or mid ladder homes), there will be more competition as cash buyers are generally favoured (I believe, I'm not an expert on these things, this is just my thoughts)

Also, I can't imagine the government offering tax breaks in this way because if people downsize their estate will also downsize. Assuming they will then live on the funds, or gift to family, then the amount of inheritance tax will be less, so the government loses out on inheritance tax as well as SDLT. Obviously this is assuming the downsize corresponds to the house value unless they buy a similar value property but just smaller in size.

I'd have thought it would be more space and resource efficient to build additional batches of smaller homes than additional larger ones?
What we need is bungalows for older people to downsize into. But developers don’t like to build bungalows because they’re less profitable. They have the same footprint as a family home but are smaller because of only having one storey, and therefore worth less.

The shortage isn’t on big houses, it’s affordable housing.

Big houses are not the issue. You really don’t want folks downsizing and snapping up the smaller homes.

Your MIL (or anyother older property owner) who wants to downsize but can't face the hassle, can easily find property developers who specialise in doing it all for them , and will organise everything. Free weekend trial visit to new home, buying the old one, organising the house move including all packing and unpacking, legal fees paid.

www.mccarthyandstone.co.uk/moving-made-easier/

You really don’t want folks downsizing and snapping up the smaller homes
Hence why we need bungalows. They’re better for older people and not wanted by younger people who are just getting on the ladder.

It's called the housing ladder for a reason I guess. People start at the bottom in flats and small houses then go up the ladder as their salary/family/equity/needs increase.

I read a good article in the FT that the "ladder" doesn't really exist any more. Lots of people are stuck on the ladder.

Good points actually @surfingwolf

But I wonder it really be that difficult to plan housing by population demographics?

@Glenorma but good size flats with good accessibility might be profitable?

We certainly can't afford the bigger family homes where we live as they are they are 1.5m plus.

Council houses, yes. Privately owned houses? No. People can buy whatever houses they want, why should someone move out of their family home to make it available for someone else.
Where is there a shortage of family sized homes?

My parents have a bungalow I’m a wheelchair user and I can’t get in there. It has steps and the door ways internally and externally are just to small. They are great if you are very fit older person but even with a walking aid it would be tricky.

Well this is different to a council house thread. People have plenty to say on kicking people out of those

Glenorma but good size flats with good accessibility might be profitable?
Older people don’t want flats. They’ve been living in family homes with gardens and they don’t want to give up that outdoor space at a time when their mobility is decreasing and they’re spending more time at home and probably have grandchildren. Everyone I know who has downsized has moved to a bungalow with a garden. Flats are typically popular with young people who are busy with work and socialising, and they don’t need outdoor space or want the hassle of maintaining it.

The incentive will be a lack of a decent state pension and having to pay for care...they will be desperate to release equity

@savemymuu

It's called the housing ladder for a reason I guess. People start at the bottom in flats and small houses then go up the ladder as their salary/family/equity/needs increase.

I read a good article in the FT that the "ladder" doesn't really exist any more. Lots of people are stuck on the ladder.

I don't see how a ladder can exist for many... I didn't buy my first house until 2 years ago at 33 with a partner and 3 year old in tow, a 2 bed flat or terrace just wasn't enough for our needs. And I'm not unusual in my peer group. It takes so long to save for the deposit that by the time people are ready to buy, the traditional starter homes are not compatible with their current stage in life. In my area the smaller 2 beds are nearly always snapped up by landlords.

I live in a good size 4 bedroom 700k house, I can’t see how selling it would help anyone. Surely it would drive up the price of smaller homes even higher?

Housing is a SUPPLY SIDE PROBLEM. We have more households than houses. Never mind the issue with bedrooms.

The answer is to build more houses. Sorry. But blame all the retirees who turn up to council meetings demanding the dog walking field stays for dog walkers only.

@savemymuu

It's called the housing ladder for a reason I guess. People start at the bottom in flats and small houses then go up the ladder as their salary/family/equity/needs increase.

I read a good article in the FT that the "ladder" doesn't really exist any more. Lots of people are stuck on the ladder.

I have never really understood how the ladder is supposed to work. Our household income is much higher than when we purchased our flat over a decade ago, but this additional borrowing power is inconsequential in comparison to how much house prices have gone up where we live.

Of course my flat’s value has gone up too, but proportionally the ‘rungs’ of the ‘ladder’ just get further apart over time, plus stamp duty rises.

People I know who own houses either:

1. moved a long way away (with long expensive commutes to work as a consequence and losing all their family and friend networks etc),
2. had substantial inheritance or family help
3. or were those very highly paid who both managed to buy flats when young and single and so had two to sell.

We shall sell our fairly large family home in about three years' time, but buying another house for our retirement gives us nightmares. We want fewer rooms but large ones like we have here, and most small houses have poky little rooms. So unless we are very lucky, we shall have little choice but to build what we want. It won't be a flat (unless ground floor with garden and garage) or in a city.

It takes so long to save for the deposit that by the time people are ready to buy, the traditional starter homes are not compatible with their current stage in life
I agree. In my 20s I’d have been happy to buy a flat but I couldn’t afford one. By the time I was 30 I wanted a family so I wasn’t interested in flats, only houses with gardens. In my town a small house is only perhaps £20k more than a flat. So all the flats are owned by landlords because everyone who can afford to buy is already at the stage where they need a house.

Umbridge34

Yes that is what the article was saying people are buying later & paying more/longer terms so much harder to build equity. Plus many then decide to start families which means the income remains unchanged. If I was buying now I would probably skip the flat stage.

I don't know anyone including myself who didn't have help to get on the ladder.

If everything else that is wrong got fixed and there was still a problem, then yes, you could encourage people to move. Encourage, not force - freedom is really important and you don't have a right to give other people's away!
But I say, build more council housing, renovate the buildings all over the country that have been allowed to rot, maybe put a limit on number of properties people can own, have more shared ownership schemes to help buyers.
Guilting people into giving up their much loved home is morally wrong - those people have been taxed on their income, paid stamp duty and their kids me that get saddled with inheritance tax. That's 2 lots of tax they shouldn't be paying imo, so let them enjoy what they've legitimately paid for!