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 government should be building lots of social houses with secure tenancies and low rents

We need more good quality homes
We don't need a society based on getting rich from bricks

YABU
One issue that's been picked up in various reports is how house building trends have created an issue.

The trend has been to build first time buyer properties and large executive housing which got developers the best returns.

What wasn't built was the housing stock in the middle. The second tier properties or more specialist properties (which weren't part of exclusive and extortionate retirement developments).

This means that the pressure on this section of the market is distorting prices. The middle tier is more expensive than it should be. The cash rich older downsizers are more able to afford this but it also means it's inflating prices and meaning those who have bought first time buyer properties are competing against this. This makes it harder for them to staircase meaning families who traditionally would move up the housing ladder are stuck in properties too small for their needs and this also makes it harder for new first time buyers due to a lack of availability of property and this pushes up prices at the bottom of the market.

At the top of the market there's an increasing shortage of people able to buy detached 4 or 5 beds. But the houses retain their value purely down to size (cos in theory they could be split into two homes though there are planning, parking and development considerations on this). This makes it harder for many people in bigger properties to sell - if they try and drop the price to sell they run the risk of pricing themselves out of a smaller property and making moving have less point anyway!

There needs to be more awareness of the issue -which as I say the government are aware of - and a willingness to force developers to build the type of homes we need not just the ones that make them the most money. The distortion in the market is naturally forcing this to an extent now as developers begin to realise money is now in these properties.

My point is that until we have the housing stock we need and sufficient wage growth to enable more workers in their 30s to be able to get a mortgage on larger properties.

I talked to our local parish council and showed them the figures for what someone in their 30s would need to earn to get a mortgage for a large 4 bed in my area. This was about 5 years ago. They knew affordability was bad but actually seeing the numbers shocked them. That did focus a few minds in terms of what they should approve for planning. In the last couple of years they've gone for smaller properties...

Nice in theory but not in practise.

1. there are very few bungalows in the town centre where i live and no land to build any. I'm not moving from town centre to outskirts where there are no facilities within walking distance. Its impossible to get a taxi here and there is no public transport to speak of.
2. the 2k and stamp duty waiver is not going to make up for the cost of making the new house how i want it (and we like our current house having spent a shed load of money on it)
3. there are 4 and 5 bed houses regularly on the market here. I'm guessing that your plan would entail them being sold at a discount so youngsters could afford them. How am I then going to afford the bungalow then?
4. we are currently storing a load of stuff as our kids live in london in tiny rooms. that would have to be stored somewhere and wont fit into small bungalow.

I could in theory stomach moving into a 3 bed bungalow and agree that in theory they can be quite practical. But in reality where i live its just not feasible.

Hm, not really. Assuming the released equity is held as cash, that will still be covered by the nil-rate band. With the residence nil-rate band, there is legislation to provide relief for instances of downsizing.

I haven't looked at the legislation myself in detail, but I understand that the mechanics of it allow for the residence nil rate band to be applied against the original higher value of the property provided that the value of the equity is still represented in the death estate.

So really, IHT isn't an issue here.

I don't think people want to downsize until they get old though

I suspect t he average 60 year old still has boomerang kids , and working

They are not old

This. We have a huge house and the whole street are large properties. Every time one of them sells its immediately split into flats or a bedsit and stripped of original features. My kids will never be able to find a house like this when I die and due to size the previous occupants just ljved on the ground floor. I won't downsize I don't think it's the best way to pass my money onto the kids.

redtoothbrush - i agree with a lot of what you said. its another reason why we wouldnt downsize - because the difference in price between a 3 bed bungalow and our 5 bed house is not large enough to justify the move and inconvenience - once you have taken into account moving costs and making the new place how we want, buying new furniture to fit etc.

Main reason we (couple, no kids) live in a four bed detached is (1) I wanted a large kitchen as I love to cook and you need a four bed for a decent size kitchen and (2) I like having a dining room and conservatory separate to the living room. Different rooms for different times and activities.

As we can afford it, why should we not have what we want.

If you move from a £500k to a £300k house you'd pocket £200k and the stamp duty would be £2.5k

if you move from a £700k to a £400k house your pocket £300k the stamp duty would be £7.5k

Is the difference of 1-2% difference in the hundreds of thousands in equity you'd pocket really what's stopping you at the moment?

My neighbours have just downsized. Took them 2 years to find suitable accommodation as not many ground floor flats /bungalows/flats with lifts on the market. However now the house is sat empty next door because the sale has fallen through 3 times in 6 months (2 due to mortgages issues and once a landlord who decided he wanted to wait for the house prices to fall). It will only work if the people buying these places are able to afford to. Absolutely think it would be great to free up housing for those that need it but how do you define downsizing my parents friends have just 'down sized' from a 5 bed to a 4 bed! You'd need some form of criteria.
I'm all for future proofing life and suitable accommodation is very important, it could also save £££ in nhs and social care due to reduced falls, need for carers etc. We read on here all the time about dp/pil living in unsuitable accommodation 'because its the family home' and they don't want to sell it and relatives (usually 1 and female) having to do extra work to take care of the over sized house. It would need to be done as part of a building project to accommodate these people in communities that are suitable for getting older. There was a project in the 70s where I live to build some over 65 council housing (mix of flats, bungalows and warden control properties) only it was up a steep hill, minimal public transport and no shops so once these people stopped driving they very quickly became house bound and reliant on health and social care in their homes. It's now been demolished and in its place are executive homes that the local families cannot afford.

Some really interesting points, to answer a couple of questions, I don't think the larger homes should be sold at a discount, but my thinking being that those who could afford them would then leave their smaller/starter homes or middle size homes, which frees them up for lower down the ladder to upsize as they see fit.

I don't think it would inflate the prices of the larger homes as ideally, lots would become available to help keep prices static. I've done a really shit diagram to try and explain what I mean...

Very good point about forcing developers to incorporate bungalows into their plans - and retirement flats need much better regulation and clarity on fees once the resident dies/moves into care to make them more attractive.

I spent last summer with some friends looking at new builds.

Not a single one was accessible.

Apparently we were unrealistic to have turned up with a wheelchair as that isn't what "accessible" means.

Forms part of this debate, I feel.

This. I'm 59, hope to retire in a couple of years. DS will head off to university in 3 years.

I've already started looking for 2 bed bungalows, and they are like hen's teeth. Developers won't build them because there isn't enough profit, so we need a change in housing policy. Instead I've bought a tiny piece of land and asked for permission to buy one bungalow.

I refuse to move into an over-priced shoe-box retirement flat with no garden, and be ripped off for service charges. Until I get my planning permission, or find a bungalow for sale, I'll be staying put in our 4 bed, half acre house because moving is more expensive than staying put..

I don't mind relocating, I'm happy to renovate but I won't be exploited.

I don't need assistance, but in the other hand, there's no incentive for me to downsize, either.

I have a (not particularly big) four bedroom, two reception house. Next door is a three bed, one reception house. It was up for sale a few months ago so I knew what they were asking for it, and I know what value the same agent has on my house. The difference was staggeringly small.

I worked out that after I'd paid an estate agent, the legal fees, the moving costs etc, I'd not come out with any profit worth having. Maybe a £3 or 4 thousand? Certainly not worth the stress and hard work that moving involves at my time of life.

So no, my house will not be released to the larger family market until I die or it needs selling for my care.

YABU
why the hell should my taxes go towards PAYING older couples sitting in £500k+ homes to downsize? They can well afford to do this as they’re sitting on a big pile of cash. They can afford the much lower stamp duty on a smaller place much better than the presumed young family hoping to buy their large home. They can afford the cost of removals and moving far better than all the poor sods stuck renting homes and being forced to move every few years due to no fault evictions.

Hell no. I’d rather the Government help those trying to get on the property ladder than those who are quite literally at the top of the ladder.

For council houses, yes I believe those long term renting and have the spare bedrooms should down size but I don’t think anyone should be made to sell their homes to accommodate the current housing crisis. They have bought that home. I also don’t believe the council should have sold off so many properties cheaply years ago as we would have benefitted from those houses now.

Perhaps many wouldn't want to though - our inlaws for example like being able to have several friends to stay at once.

Like people who have retired early because they can. And now the Government are all "Oh isn't it terrible that older people are economically inactive." Well, maybe they don't want to work and there is bugger all you can do about it! Not without politically disasterous results anyway.

My parents want to move from large 4 bed detached in affluent area but all the bungalows in their area are so few and far between that when they do crop up (when someone inevitably dies) they go for big bucks and they would hardly be making any equity so not much incentive for them really. They don’t wish to move from their affluent area as they’ve made good connections with their neighbours and community etc.

This^
It's very tricky☹️
we do need ways to incentivise people to move into more suitable accommodation as they age, the problem is that humans tend to get stuck in their ways as they get older and are more and more reluctant to leave familiar surroundings☹️

One of the problems is old fashioned bungalows that downsizers would like have large gardens, these are bought up by builders around here and turned into huge houses. New build bungalows are small a with tiny gardens and use more land than terraced houses.

But they can't realise that profit, because they still have to buy their new place to live in. And as I demonstrated above, the difference between the cost of their four bed homes and a small 3 bed might be nowhere near as large as you think. I forgot to even mention stamp duty in that post either. Agents fees, legal fees, moving costs and stamp duty will soon swallow up the difference.

the problem is that humans tend to get stuck in their ways as they get older and are more and more reluctant to leave familiar surroundings☹️

Probably because they've got their home, their community and their friends and in some cases their family where they are and they like where they live.

I'm getting very fed up of what seems to be an attitude that elderly people are parcels to be dumped where they'll be less trouble and it's unreasonable of them to object because they 'don't like unfamiliar surroundings.'

Personally you couldn't pay me to live in one of MCarthy and Stone's geriatric ghettoes.

Not being able to make big bags of profit isn’t a reason to get government help to downsize.

I think they should incentivise people in social housing to downsize where they've got a lifetime tenancy and are under occupying. The problem is the availability of suitable property for them to go to.

I live near to a 1960's built council estate (now housing association). The houses are large 3 bed semis with big gardens. Many are now privately owned but I know of one, occupied by an 80 year old widow who would love to downsize but wants to stay I this village. There's nowhere for her to go. Others are also under occupied - some with a single occupant others couples. Meanwhile young families on low incomes are struggling to get and pay for private rented properties.

I'm not sure that any incentive from the Government for most home owners would be enough to make them move unless they were planning to do it anyway.

I agree but the rich people who make the rules have got a lot of money tied up in bricks, they're not going to agree to anything that reduces their wealth or income