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

I don't think this will work for many reasons all ready given.

For me, we live a 4 double bedroom semi with a separate office as I wfh. We've extended it as and when we could afford to and its our family home which we have brought up our DC. Its exactly how we want it to be more or less and we dont ever want to move. We have planned how we could live on the ground floor only when we get old/immobile so we wouldnt need to move as we couldnt manage the stairs.

Most people I know of the 60+ generation (my parents, friends parents, work colleagues, neighbours etc) dont want to move for similar reasons. They like their home the way it is, they have a commmunity where they live (and who help each other out when needed) and generally feel like moving is a hassle and an expense with limited positives.

I would only move when the time comes if I could move to a big bungalow, on a reasonably large plot with a garden I could enjoy, driveway for at least 2 cars and in the same area I am in now. So in essence, what I already have now just on one floor (bungalow). I dont know anyone who aspires to move to a retirement flat and if developers stopped building these and instead concentrated on bungalows with parking and gardens, maybe more people would downsize to them.

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.

I downsized some years ago to a small bungalow. Didn’t need to then (in fact still wouldn’t need to). But I haven’t moved house many times so viewed it as a stressful life event which I preferred to do while I was still well able to cope with things. I was able to renovate with my equity and now have an easy to run home with reasonable utility bills. If I need maintenance doing it’s at a manageable cost. I only moved half a mile down the road and have easily accessible public transport and services and my friends are still nearby.

We have a few building sites in my area - of approximately 500 projected houses overall there are plans for TWO bungalows, and they are sited at the furthest end of a site well away from public transport and services 🙄

They do not care about ethics, we have to hold their feet to the fire so that they behave as if they care about ethics
Power corrupts, people in power are usually corrupt, all we can do is shine the big light on them at all times and hold their feet to the fire and make them do what they are supposed to

The real issue is London and the SE of England (and few other hotspots) are overpopulated. Houses are cheap where there's no work available.

We had an awful time trying to buy. The small town that we used to rent in has an overwhelmingly aged population. Most of the homes on our street were 3/4 bed family homes owned by elderly widowed ladies. Our family is there and DD goes to school there but we ended up with a new build starter home in the next town over. It isn't what we wanted but there was nothing on the market.

Another problem we faced aswell was that the homes owned by the elderly that did go on the market were very outdated and hadn't been maintained well. I would imagine that many FTBs can't afford to buy the property then fork out thousands for a new kitchen, bathroom, replastering, a rewire and full redecoration of a house that hasn't been updated since the 70's. Plenty of developers do though and then sell it on for double - again taking it out of the hands of those who need suitable and affordable housing

No thanks. Well off boomers who can downsize should not be getting any extra help.

I would whack inheritance tax up. I know how unpopular that would be but maybe in ten years when more and more younger people are unable to buy and wealth is even more concentrated into certain families, people might wake up to its fairness.

The only long term solution is housebuilding. Houses are expensive because they are scarce. Make them not scarce.

And I say that as someone who’s just bought at the top of the market for a very ordinary 3 bed terrace, costing just over the national average house cost.

I wouldn’t put up inheritance tax nor reduce it but I’d make sure people didn’t try to get round it (eg as pp has)

Houses are expensive because they are scarce. Make them not scarce
This is true but the supply and demand of credit also feeds into house prices, not just a supply and demand of the houses themselves

In many cases the money you would have freed up by downsizing would be an incentive in itself, rather than giving people even more money to downsize.

You are right.

I don't need help with moving costs. I need somewhere suitable to move to - but I can't find anywhere.

Is it?

How many houses are used as holiday rentals?

The places with some of the most acute problems have highest levels of air b and bs.

Sort of. Agree downsizing incentives are badly needed. You’ve got the incentives wrong tho. My village is absolutely full of old people living alone (or with a spouse) in 5 bed houses long after their family has grown and moved out. They won’t accept money to move though, they have money, the elderly big house owners do not need money at all.

But, all the ones I know actually want to move. The problem is that all the suitable properties are far away in cities and they are village people with a family and friend network here. 20 years ago this village also had many many 1-2 bed bungalows, and old people downsized into thise, but the bungalows have all been bought by developers who demolish the bungalow and replace it with a 4-6 bed house to sell to ex-London commuters.

We need more control over what developers are allowed to build and very specifically we need more purpose built flats for the elderly in the same areas where the elderly currently live. Without that you can offer £2k or £200k but the elderly aren’t gonna leave their lifelong village to go live in a retirement community 100 miles away from all their friends.

But there is plenty of room round here to build retirement flats 🤷‍♀️

This! You cannot simply transfer the deeds to your children to try to avoid IHT (because it’s not your property anymore) and go on living there without paying the owners of the property market rent. When it comes to IHT the property will still be seen as part of your estate and taxed accordingly.

Exactly, @Sarahconnor1 My elderly Dad wants to move into a retirement flat and we're actively looking for one. But there just aren't that many available and they get snapped up quickly. He'll find one eventually, but it's not as easy as all that - even when you're looking across a fairly wide area.

Agree with PPs about the lack of properties that are attractive for people to downsize to.

FiL is about to retire and could do with downsizing, he has a large 4 bed house for himself. He has had his house valued as was told it would sell quickly and there would be a lot of interest, the estate agent then said to him that the biggest issue he’d have would be finding somewhere he’d want to live.

He doesn’t want a flat, he’d like a small garden.

Only needs 2 bedrooms but wants reasonably sized living area (not common in new builds).

Wants something low maintenance that won’t be costing him a fortune to upkeep.

The problem is that once he has ticked all these boxes and sold his property he’d only have about 100k extra in his pocket, to live in a much smaller house in probably not as nice an area.

You're wrong. Inheritance tax-wise, yes, the seven year rule applies. But for deprivation of assets prior to care, there is no limit.

Aside from the dubious morality of offering handouts to wealthy pensioners at a time when many young families are struggling to feed their kids, this won't solve the problem as the problem is that there aren't enough homes. You'd need to get them into house shares and I don't see that happening.

I think with loneliness being an issue for the older generations, the community aspect of housing for older people ought to be part of the planning design for downsizing properties. Bungalows with big rooms, decent storage, a garden but hopefully also some form of outdoor community space and indoor community space. Places to meet with others - of various ages - for a chat and a cup of tea on a cold, wet day.

The main problem - as demonstrated by the naivete shown here - is the starting point most people have that the system is in someway "broken" and therefore amenable to "fixing".

If people really wanted something to change they need to realise that the system is working exactly as it was always intended to work: as a mechamism to funnel your labours into their pockets.

Or, to put it another way, if you wanted to devise a system that did that, it would look rmarkably like what we have.

^The problem is that all the suitable properties are far away in cities and they are village people with a family and friend network here.*

Yes, @Internetstranger, my Dad's experienced this. New retirement developments are being built in and around the nearest big city, but it's miles away from his current location. One of his acquaintances did move to the city a couple of years ago and he's not very happy apparently, because he's isolated from his old friends. Many of these elderly people don't drive anymore so rely on public transportation and it's too far to travel.

My Dad's looking in the smaller towns in his area and there are some flats, but not enough.

I've just bought a house - a smallish three bedroom with drive, garden, in a quiet residential street and in catchment for good schools (primary and secondary). There are loads of couples with children here, but I live alone and certainly don't need the space. However, there are no two bedroom houses in areas I was looking at, and bungalows are more expensive for significantly less space. My area needs more appropriate properties to cope with an aging population.

In my experience older people leave it too late to move. This happened with both my parents and in-laws.

One moment they were late 60’s early 70’s in fine health enjoying retirement then they started to gradually decline physically and mentally where the thought of moving just became too much bother. Of course even if they had been willing to downsize there may not have been a suitable property available.

As for signing your house over to your children, I know one family who put the house into a trust. The parents and children were equal trustees and the house could not be sold to pay for care home fees.

I don’t think that anything would incentivise us to move from our modest 4 bedroomed bungalow. If we moved we would loose our neighbours, the majority of whom we have had for over 3 decades. We already use two bedrooms for sleeping and any new property would require 3 bedrooms so we have a spare bedroom/study space. The costs involved in moving would result in us not actually freeing up much in the way of monies, if any. We could actually find that purchasing a more modern bungalow costs more than we could sell our property for or we break even. Quite frankly it would not be worth the upheaval or the loss of long established social connections and support networks in our immediate vicinity.

Lots of younger people are not interested in bungalows either so we would be more likely to sell to someone nearer our own age, who may or may not be looking to significantly downsize.

I think it's a good idea to waive stamp duty for anyone downsizing (obvs with exclusions for those buying multimillion pound properties), and to give a moving grant.

I think there should also be a planning restriction on turning bungalows into houses by adding whole new floors, to ensure that bungalows stay as bungalows.

But I think what might force most of this downsizing is the cost of fuel bills. That way too the Tories can shrug because it's not their fault.

Yes you can. My parents were on the deeds of my gran's house from 1987. Didn't pay "rent" only council tax and the bills. When she died in 2020 from covid, my dad got her savings and a sum from her life insurance after probate. Oh and she was in an intermediate care home because she'd been sent there just before lockdown and couldn't leave during lockdown. She died in there from Covid.