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.

A better policy is to have the higher bands of council tax actually reflect the value of the houses.

It’s crazy that someone in a £10million house can be paying the same as someone in a £350,000 one.

It's hard. My parents will need to move sooner or later (probably on the sooner side) because their 4 bed really isn't suitable for anyone with mobility problems and the downstairs layout doesn't lend itself to installing a shower room so you would need to be able to use the stairs to access washing facilities.

Ideally they would move to one of the bungalows in the same street which are ideal for an elderly couple but they very rarely come up for sale.

My grandparents actually swapped their bungalow for a family sized villa occupied by an elderly widow when they were young parents looking for more space back in the 1930s. The arrangement suited both parties and the way the story was told, no money actually changed hands which seems extraordinary!

Maybe my parents should speak to the couple with twins living in the bungalow down the street..

@RHTawneyonabus doesn't everyone want those things?

@stayathomer

I would ‘incentivize’ them with a bedroom tax for each additional unused bedroom. I think that would get a few houses on the market Wow, you're lovely aren't you?

Can you imagine any political party suggesting it? They’d never get elected in a million years.

I agree in some ways but why should those without children/without children at home have to get rid of a bigger house?
Are childless people not allowed spare rooms? DH and I don't have children and don't know if we will have them, does that mean we can't live in our 5 bed house until we do? So our visitors have to sleep on the sofa now?

I understand that a single, older person who doesn't have many guests stay (as in, at most they'd have one room needed for guests) could sensibly downsize from a large property. But that shouldn't be for the sake of younger families, it should only be if they want to or if it's safer (stairs etc). People with kids shouldn't be given the priority over larger houses. So so so entitled!

Those retirement villages and flats are fine but the service charges arent small and you have to make sure you have that money put by for life. They go up with inflation and its an expense you cant control. And you lose your autonomy which is hard after a life of making your own choices. Things like you might feel the guttering need replacing but the committee decides to paint the railings so the guttering has to wait or you fancy marigolds but they bought geraniums. It might not sound a big deal but its hard letting go.

Really we should abolish the PPR exemption to CGT. In many other countries they pay tax on any gain on their home (less any money they spent on it).

The fact that we don’t pay tax on gains on our home is a large part of why people regard their house as an investment, as it’s almost the only tax free way to make money in the UK.

The problem is of course, any such change would have to be brought in very gradually over the long term, and with plenty of notice, otherwise it’s unfair on those who have planned their retirement based on the eventual gain from their house and there being no CGT on gains. UK governments don’t do long term, and they especially don’t like bringing in unpopular measures that would only bear fruit years later.

'You seem to think those people just sat on their arses and the fairies delivered mortgage free houses and pensions. People in younger age groups need to stop pretending that’s not the result of around 50 years work and that people have no control over their date of birth. What do you want those people to do? Lots of them are subsidising their kids with house deposits already - what more do you want?'

I don't want anything, I'm providing a summary of why the housing market is a mess. Not a personal assessment of your character.
Housing is an issue.
The wealth is inert as generations converge.

www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/kgq2/qna

It's not hard to understand what yrs the strong growth in wage/money occurred from that table. If prices rise faster than wages, then the money cannot buy as much. House prices compounded for decades, wages have stagnated comparatively since 1990's.

I'm not blaming, just explaining, I don't have an answer.

The why should I it's my home is a valid argument, however it does have consequences when dealing with a finite resource such as housing.

Lucie I agree. Ultimately people want someone else to downsize their home because they made the choice to upsize their family.

I think my in laws would love to downsize, they are still in the family home a 5 bed semi. FIL is very practical, and MIL has dementia so being all on one floor like a bungalow would be ideal for future caring. But like most older people they haven’t really done much to their house for 30-40 years. It needs a new kitchen, bathrooms, decorating, carpets etc and just looks unloved. So despite being a 5 bed semi it probably only worth if very lucky 350k, whereas a similar state 2 bed bungalow is more like £450k here. So even if stamp duty etc was ditched they can’t afford to move.

We as a country need to think about what we are going to do. By 2030 1 in 5 people will be over 65. It will be like having 3 maybe 4 generations under one banner of ‘elderly’ all with very different wants and needs. How do we cope with that?

This is my house. I'm buggered if I'm going to leave my home of 30+ years so some random strangers can live here instead and I have to get rid of a load of my possessions because they won't fit in a smaller home.

The type of housing with the greatest shortage round here is smaller starter homes that aren't owned by buy-to-let landlords charging exorbitant rents, not bigger ones. There's plenty of those.

It's not just about not paying stamp duty and moving costs.

The real issue in many areas is that older people's 'large' family homes will still cost a considerable amount to replace with a smaller property. So why go to all that effort of downsizing when you have to pay what appears to be too much money for a much smaller property.

My in-laws moved on a whim to a much more manageable flat about 20 years ago. On the surface it seemed a sensible move.
They regretted the move so much that I don’t think they spent any time in the place. It was a perfectly nice flat but it was in a development and there was no one around. I think they found it quite creepy. They tried to buy one of their old neighbouring properties a couple of years later just so they could look out on traffic and people passing the house but prices had shot up. It became harder for them when we would visit and had to stay in a local hotel as their was no space in their flat for family to stay.

I have downsized once, and once I can be confident the children won’t need to stay, or if the garden becomes too much for me, I may downsize again.

I believe the problem is second home owners. BTL, fair enough I wouldn’t do it myself but I appreciate that some people need to rent. But buying a second (or third!) home that will go empty much of the time is just greedy and wasteful.

We as a country need to think about what we are going to do. By 2030 1 in 5 people will be over 65. It will be like having 3 maybe 4 generations under one banner of ‘elderly’ all with very different wants and needs. How do we cope with that?

Agree but no party seems to want to address this.

My parents would love to downsize but it would mean moving out and away from the community they have lived in since their 20s. It would be completely isolating and as my mum says where will all the grandchildren sleep when they come over?! (Pre covid obviously)

I think everyone should have the size of house they fancy and can afford.

It's none of your business really OP

@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.

The money for legal costs comes from the sale - so if you're downsizing you free up money and it all gets paid at the point you sell and buy the next one.

Older people are often looking for a bungalow to plan for future mobility problems. However because of the footprint of a bungalow they're often as expensive as a larger house. I am now on my own in a large house with a big garden, looking around were I to sell it I would pay the same, plus fees for a 2 or 3 bedroom bungalow. I have decided that the potential costs of moving, stamp duty, legal fees, moving, will pay for a gardener for many years.

Exactly @Lucieintheskye

Yes, a lack of suitable properties is an issue. I want quiet, a garden and decent-sized rooms. That tends to mean four or even more bedrooms, when actually I could do with two post-retirement (or even now if there was other space for two people to work comfortably at home).

I lived in a terrace house previously that fit the bill, but after having nightmare neighbours in another property don't want to share a party wall again. The recent washing-machine-at-night thread reminded me why I really can't take that risk!

You can have a small detached house - but rooms are pokey. Or you can have two decent sized bedrooms - but in very close proximity to others. Neither option sounds appealing.

"But surely the money to pay for the legal (etc) aspects of the move comes from the equity she will have freed up selling her family home?"

In many cases, because a smaller bungalow is around the same price as a family home there isn't any equity to realease by downsizing (unless to the the sort of 'starter home' that retirees generally don't want). A friend's parents found that downsizing to a smaller bungalow with a nice garden wasn't possbile as the 2 bed bungalow they liked was barely cheaper than the 4 bed house they were in (same area), and the small price difference was less than the stamp duty/legal fees. They couldn't afford to pay this, so stayed put.

@Sprockerdilerock but they do have cash to pay legal fees etc, they will have enough and more of it when they downsize. I think they just refuse to see that. They just see the marketing figure and assume that they need to have that amount. But really that money is all locked up in property and useless for their life!

Why should they move?
My mother lives in our family house that she has been in for over 30 years and bought new. She raised her children there nursed a child through cancer there and lost my father in that house. it holds her memories and they also worked damn hard to have it, every plant in the garden she planted.
She has even had people Knock on the door asking if she will sell it. It is in a very good catchment area, no lack of housing just people spotting a very desirable house. ( if they new the pain it has been through they may not be so keen!)
No absolutely not. It's not lack of housing its cost of housing! If you can't afford a home you start at the bottom ie a studio flat etc and work up. More starter homes and flats are needed not big expensive houses.

@Wotsitsarecheesy, that sounds unusual. I live in an expensive city and a family home is way more expensive than a bungalow... unless of course they are only looking at 3/4 bedroom in which case it is still a family home they are looking at and not downsizing