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

What would make a big difference would be if there was a process by which people could swap houses. It would cut down on the stress of being in a chain, and maybe there could be some way in which the process could be expedited or stamp duty reduced for both parties.

It's honestly the stress of buying, selling and moving that holds me back, as much as anything. The older you get (especially once your spouse had died and you're having to deal with it alone) the more daunting it feels.

But then nothing will change.

I'd support your plan, but the IHT rules would need to change. So increase the IHT threshold to around £675k (up from £375) but include the primary residence in calculating the value of the estate. The average house price is abut £300k so the jump in threshold needs to be a big one.

I downsized and save a fortune. OK, where I live houses aren't expensive enough for stamp duty. But I downsized from a large 1950s bungalow that i had lived in for 20 years to a smaller, new 2 bed.

My utility costs are lower (even allowing for recent increase) and I have no mortgage (didn't on the bigger one either) so my fixed costs for the month are now around £250 leaving everything else as disposable income. So despite only having the state pension to live on (around 10.5k) I am comfortable and can still afford a couple of cheap foreign holidays a year.

Maybe not for everyone but I value comfortable every day living over hanging on to a property that is much too big for my needs.

Yes it will. Have you looked at the demographics? Birth rates are lowest ever, the baby boomers are starting to die off. Lots of big houses will come on the market through natural attrition.

I have sympathy for this and any idea of doing it would go down badly

I own and live in a four bedroom detached bungalow which we bought when we first married.
We've raised our kids here and now for the most part I live in it on my own as my husband works away for long periods of time.
The only way you will ever get us to leave our home is feet first in a wooden box.
When the kids visit with the grandkids at least we have enough rooms and beds to accommodate them comfortably.
We worked blooming hard to buy our home and keep it maintained.
We signed it over to our kids a good few years ago so even in death or care homes, the government won't get their grubby mitts on it.

A home is not just about its size, but things such as its location, whether your neighbours are helpful (or just not unpleasant), even before you consider the costs and hassle of moving. Read any of the threads about solicitors, or any about estate agents, and there is an argument for staying put all by itself.

Reform the process of house sales and purchase in England and Wales before considering anything else to encourage downsizing.

We signed it over to our kids a good few years ago so even in death or care homes, the government won't get their grubby mitts on it

Erm...You may want to check that.

Good luck with all of the many things that could go wrong with your cunning plan!

You cannot just sign your house over to your kids to avoid care costs (if that is your aim). Very rightly councils can look back indefinite years to look for assets being hidden . There is no limit.

We signed it over to our kids a good few years ago so even in death or care homes, the government won't get their grubby mitts on it

I wouldn't be too sure of that. Google 'deprivation of assets.'

Developers want people to want the homes that they the developers want them to want.
If for instance manufacturers of jeans insisted on making only flared jeans when everyone wanted to wear straight jeans the manufacturers would go out of business.
But still developers are building houses which are completely unsuitable for the needs of the population 🤷
The market is completely and utterly dysfunctional☹️

Yes I agree with you whole heartedly

Okay. I just looked.

A small three bed bungalow in my area costs the same if not more than my four bed house. A two bed bungalow would be a little less, but the difference would be swallowed up in the expenses and stamp duty.

If I move to a cheaper area, I would lose my support system. At my age and as a widow, that strikes me as an unwise thing to do.

My in laws are looking to downsize, they wouldn't want a flat or a retirement village-there are very few bungalows-a lot of them seem to have been turned into family homes. New developments tend to be for young families as the developer wants to put as many houses on as possible. There is also the whole process of moving which is tough enough for most of us, let alone when you are older. I wish they would simplify the English system.
It is really difficult to find a property, so I get why people stay in their house.

I think it's a good idea.

Even if people are well off, if downsizing will cost £10k, they could stay put and give that £10k to family when they die. I think many would think about it that way.

We could upsize but won't because we don't need to and because I can't bear the stamp duty. It just doesn't feel like a good use of money right now. I think stamp duty is a deterrent for many. There are very few houses I would move for.

Except for all the younger immigrants we need to run this country changes that.

Remember, if your income is derived from property you desperately need immigration to keep demand over supply.

Luckily the country is run by people who get that. Otherwise we would be in a right state.

For those doubting the signing over.
If you sign over seven or more years prior to death or care then they can't take it.
It was all done legally with a solicitor fifteen years ago.
Hopefully by the time me or my husband die or need care it will make it over 30 years ago.

@MrsDanversGlidesAgain

Interesting. I’ll have a look at that. My SIL says she owns her parents house in order to stop them from using it to pay care fees potentially in the future. I thought it sounded a bit fishy.

Well quite, and this is a new situation for the government, they are used to always having the whip hand because there was a shortage of jobs and a large pool of unemployed people needing jobs.
Now we have a shortage of people who are willing to work, and the government has no leverage to make them work.
I know I'm going off topic but it probably plays in to the housing situation to an extent?

Mentalpiece 7 years is inheritance tax. Nothing to do with care costs. Seriously doubt your legal advice if they thought it covered care costs.

I think tax relief on a primary residence is no bad thing. At all. It's a basic human desire to have security of housing & I would abolish stamp duty on all primary residences under £2m. However, I would tax THE FUCK out of subsequent homes, license landlords to high standards and use the money raised from these schemes to build suitable council accommodation.

I hate the feeling that taxes are paid on one's primary and sole residence when the work that's gone into getting that home is significant.

IHT is something else that needs a total revamp but I'm not straying into that as well as the housing market

There is no limit on how far back deliberate deprivation of assets can be investigated if you or OH need means tested social care.

www.independentage.org/get-advice/health-and-care/paying-for-care/giving-away-assets-to-avoid-paying-for-care

Seems to be a loophole re: deprivation of assets. My SIL has had her name on her parents house for years and they are early 70s now still living independently with no care costs etc.