To suggest the government incentivising downsizing

[PoinsettiaPosturing]

There seems to be a couple of issues discussed very frequently here that could be potentially helped (not solved) by the government incentivising downsizing for home owners.

There's a significant issue of property availability to buy and rent, and a huge number of older people who are single/couples in 3/4/5 bed houses. This means that younger generations are stuck in their starter homes and priced out of long term homes.
MIL & FIL have a 4 bed detached and constantly complain about the cost to heat and maintain it, but hate that it'll cost them loads in stamp duty, moving fees & solicitors costs to downsize.

Perhaps Rishi could incentivise downsizing, so if you reduce the number of bedrooms when you move it over 60, then you're relieved of stamp duty, and perhaps receive a £2,000 (debatable) grant towards moving costs and expenses.

There are also constant complaints that older people stay in their homes long after they 'should' based on significant care needs, decreasing mobility and long term repair issues.

The incentive could encourage people moving to smaller houses, flats, retirement communities or even combining households with family members.

This would hopefully:

1. Free up larger properties for families/younger people wanting to upsize
2. Hopefully mean older people have less heating and energy expenses
3. Encourage older people to move into properties more suitable to reduced mobility & care needs longer term
4. Mean older properties are restored/better maintained

I appreciate there are loads of people who want to stay in their family home until the end, and this wouldn't change that view point, but maybe a social movement towards older people reducing the size of their homes would create a bit of social contagion where it's more openly discussed?

Also, house builders could be encouraged to build more bungalows/smaller homes specifically for this scheme which perhaps are built with stair lifts in mind etc.

YABU - this will never work, ridiculous suggestion

YANBU - this has legs, you should go into politics

The main reason l won’t move is stamp duty. We still have Dd at home. But do l want to pay a load of stamp duty to downsize. No, not really. This is one of the biggest barriers.

All it would do is a minor temporary shift

Most people will die and release their homes anyway - all you can do is bring forward the release of sone homes early which will mean fewer homes next year

And then you need the right homes on the right places to make it happen

So small bungalows close to town centres might be attractive to older people but they don't exist

There is no way the general public would support tax relief for homeowners. What you say would make sense and would encourage me to downsize, but the debate would be twisted into being all about how unfair it is that rich people shouldn’t get tax breaks, even though being a homeowner definitely doesn’t mean rich.

Only thing I would change the age limit you've suggested of 60 - make it across the board. Other changes in circumstances besides empty-nesting might lead to a smaller house being needed.

We live away from our family and they can't afford to stay in an hotel when they visit. What started with one child has now become child, wife & three children, ditto my daughter. Suddenly out 4 bedroom house is looking small, so when we move well probably move back home(where houses are cheaper) and either upsize or buy a house with more reception rooms

People in the position of owning big houses with no dependents at home do not need assistance from tax payers to move.

Agree. Inheritance tax is a massive disincentive to downsize as your main property is tax free, IIRC. If you downsize from a £1million family home to a £400k smaller property, your house “profit” will be subject to IHT.

It’s not helped by crap house planning -lots of nasty retirement apartment blocks but I don’t think that’s what people want. Retirement properties seem to be a nightmare to sell on as well.

This is ok in theory, but not necessarily in practice. I would love a bungalow but where I live they are TINY. Both me and DH WFH so need an office each (for confidentiality reasons). When you get into your 60s+ you have accumulated lots of stuff, and no, I don't want to get rid of it all.

We are/will be in this position. My DF is in a 4 bed home. He will leave only in a box as it is his and he has worked for it, and can afford it. When he goes we will move in and sell our 4 bed. (3 adults live here)

*This means that younger generations are stuck in their starter homes and priced out of long term homes.

If people are priced out of long term homes how do they afford these 4/5 homes you want freed up? or are older people supposed to sell them at a discount?*

Shit, formatting fail, sorry.

There is a lack of suitable property for older people to move into.

My in laws own a 5 bed they would love to move to a smaller property, ideally a bungalow. All the housing estates they are building in the area are 4-5 bed detached with postage stamp gardens.

It's a difficult one- my FIL is in this position rattling around a place that's too big for him on his own however when you discuss downsizing he doesn't want a flat (goes on and on about leaseholds and whole blocks going up in flames) - there are very few bungalows and doesn't want a flat in a retirement complex because of difficulty of selling them on and family members being stuck with paying huge service charges. He is 83 and has knee problems , so another house won't work. In his case it's not about 'incentivising' - he's not poor- it's lack of options that appeal to him in areas he would actually want to live or knows anyone. He would be happy to rent too but doesn't like the idea of lack of security and some of the rents they ask for in the over 55 developments are mental. £3000 a month is quite common for a 2 bed flat. - plus council tax and utilities!!

Yes you have a point

My mum and dad live in a four bedroom two bathroom house ,my mum's disabled and they have now converted the dining room into their bedroom,they don't use the upstairs at all ,problem is whilst its a lovely family home it's in a desirable area and would be out of the price range for many young families .

There are not enough houses.

Anything that's done to 'encourage' the market only has one real effect - increasing prices.

If it becomes easier for people to downsize to smaller houses, that means more competition for those houses and hence rising prices. That then knocks on to the rest of the houses in any possible chain.

It is/was the same with the help to buy scheme:

If there are 200 people looking to buy 100 houses and the 100 with most money can afford £250k then the market will find its natural level and the houses will sell at £250k.

If everyone has access to an extra £20k through whatever scheme is dreamed up, it just means those 100 houses will go for £270k instead of £250k.

If you think that's overly simplistic, have a look at what happened to the major developers' profits when our talented, honest, and entirely genuine, government introduced HtoB...

That would encourage us to downsize. Just DH and me in 5 beds, 4 baths. We used to have a lot of visitors but we are all getting older.

We remained in our 3 bed house due to a lack of good properties that were bigger. Now DS will be leaving home in a year or two. Overall it’s saved us money. My Aunt ended up miserable in a six bed house but my Mother did downsize from a four bed to a one bed bungalow. I think getting rid of stamp duty to downsize is a good idea but agree it would be unpopular.

YABVU
Property tax reductions very frequently leads to property price growth (bad for young). So you're suggesting effectively funding some of the richer members of society. Property is woefully undertaxed (capital gains on property if primary residence is not taxed). Moves to stop taxation that leads to property being used as investments rather than places to live would be better .

My impression - although I have to say I don't know huge amounts about this - is that a lot of the smaller just properties are unsuitable for older people. A two up two down terraced house with steep stairs is a lot less accessible. What is suitable (bungalows essentially!) is really exensive because there is so much competition for them. House builders build houses for families primarily, so again not really suitable for elderly people with reduced mobility. Likewise flats often have stairs that are just inconvenient for older people.

Why don't you downsize anyway? Surely you will have loads of equity which you can enjoy instead, and not have to maintain a 5 bed house?

YANBU but then they also need to build property suitable for older downsizers. Many would like to move, but there's nothing suitable for older people's needs. A lot of new builds seem to be high rises by busy main roads but not near amenities, and they're tiny with no storage (for all the stuff you can't give your kids who are still renting in their 30s+) and no space to host family.

If more bungalows were built, more bungalows would be bought and promptly knocked down to put blocks of flats in their place. Profit comes before suitable housing.

Seriously your idea is horrendous on so many levels and will most likely make housing crisis even worse.

Yes absolutely agree with you. We live on a road of larger 4+ bed detached houses and most are occupied by single elderly people (being supported by private carers) or elderly couples.

My own parents are now elderly and infirm, complain constantly about their 4 bed house but won’t move. Now it’s “too late” apparently.

Surely the stamp duty boomers would have to pay to downsize would be more than covered by the enormous gains they’ve made in property value? Our elderly neighbours bought their house for £25k 40 years ago and will sell for well over a million. You’re telling me they can’t afford stamp duty!?

Not really, as if it was kept up it would increase availability of larger homes for an additional 20 years ish per applicable home?