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 love my house. We are retired and can afford to live in it. I don’t necessarily expect to be here when I’m 80 but it’s got all we want. As long as we can drive. If we ever need to release capital we might need a rethink.

Bungalows are always expensive. Their footprint is the same as a house but a house is bigger X 100% on the same footprint. Or more if it’s a town house. So few builders see any profit in building them. We have very attractive retirement flats in the nearby town. Around £550,000. We could easily afford this and we might. Just not yet!

Just suggested post to DH. Now he says if one of us needs a carer we can get a live in one as have additional bedroom.

I can see that we need ways to fairly distribute a scarce resource, but I just cant see how that could fly, people would just 'game' it, no we dont have 6 bedrooms, we have 2, and 4 offices, etc
I do feel that council tax bands should be extended so that those with more expensive properties pay much more than they do now.

From an outsiders opinion I think what you guys are missing is the concept of retirement communities that are becoming more popular in the US.

it’s essentially designed for different stages of retired life. From Independent living to Hospice.

Essentially you buy in for something like 300K and then pay monthly rent of about 3K. Your monthly rent covers your apartment and meals (the Ind Living apartments have full kitchens), activities, and weekly cleaning. Then as you age and your needs change you can transfer in to the asst living or full skilled nursing. Your buy in amount pays for that care + Social Security + Medicare.

My old neighbors moved into one when the house got too much for them and they were very cognizant of the fact they don’t have family to help them. They’ve basically prepaid their Long term care. They’ve built a great friendship network there too (although to be fair if we dropped them on a deserted island we’d find them in a month hosting cocktails and dinner to a group they flagged down)

now clearly the entrance is a barrier to a lot of people, but it’s realistic for those selling homes. I always felt like this is a model that could be adjusted for different price points. We’re still close with our old neighbors so are watching their experience with interest. I’m all for the concept and barring any unknowns this will probably be what we do.

None of this is going to help, the ones that won’t leave their house… but it is a good option for a lot of people. I expect it will expand as the number of couples without children continues to grow.

@saltinesandcoffeecups We do have a fair few of those here too , thing is though even many of those that can afford the' buy in' totally balk at paying £3 to £4K a month for food and services and bills because it would totally whip through any other savings- and is around 3 times what many spend now. This is despite the fact a care home would take that money too if they have assets and was needed . It's a mentality thing.

That exists here too. I think it’s sad though because they can’t see the benefits. Here the 3K is more or less their monthly Social Security (national pension) (for a couple) so in theory you’d be left with discretionary spending out of savings since room&board are covered + utilities and cable.

Honestly most wouldn’t see a big difference from living in a mortgage free house when you factor in taxes, insurance, maintenance, and increased costs like lawn care/snow removal/cleaning. It is more expensive but not prohibitively so.

As I said I feel like the model could be adjusted for different price points. Typically these are pretty high end places, with lots of amenities. I mean the pickleball court and virtual golf room is nice, but I’m sure some would forego that for less rent 🙂

I’m just happy that my neighbors will still be together if one needs more care and has to go into asst living or god forbid memory care. They’ll also have their friends they’ve made there.

Now he says if one of us needs a carer we can get a live in one as have additional bedroom.

Good luck finding one! Been through this recently did some relatives & it's a nightmare. Costing 1.5k a week currently but you get what you pay for.

It wouldn't work. You just accelerate forward property that would have been available in 10 years time.

Costing 1.5k a week currently but you get what you pay for
OMG, how can anyone afford that on a pension??

@saltinesandcoffeecups Oh I agree with you, although pensions here nowhere near that level but the rents are!! We do have some other good options though - including some nice shared ownership developments for over 55s by Platinum skys in places like Poole, Christchurch etc. so you can release cash , still own 25 or 50% and have the security of tenure - so part rent/part own- service charges around £600 a month, rent around£600 but great amenities on site and very modern stylish places. For the 'funkier' mature customer!!! And apparently these shares are easier to sell on than many of the older style sites

We (DH and I, no kids) live in the traditional type of three bed semi that has two good size bedrooms and a box room. Downsizing would basically mean moving into a flat which we don’t want to. Not yet anyway.

I think there needs to be a focus on creating ideal properties for these older people to move into.
MIL and FIL are both struggling with mobility and in a house far bigger than they need, however they want to stay in the village that MIL has lived in her entire life.
There used to be bungalows, but those bungalows have been converted into houses.

She did briefly consider leaving her village, however the places aimed towards the older generation which were flats, were priced around the same as her house is worth, then there are huge, HUGE maintenance fees which do include some sort of pop in service, however not something they could afford.
So they'll stay in their home until they need to go into an actual home because they have no other option really.

Not sure why we need intellectual contortionism to solve the housing crisis. When there is too much demand for something and too little availability, this is what happens.

Build more homes.

Yes - but build the kind of homes people actually need. Which aren’t necessarily the most profitable ones for the developers and profitability is their sole interest.

What Snugglemonkey said. Know of someone downsized from nearly a million worth property where they benefited from increase in value over the years, doubt they needed a relief or government help.I understand not everyone is in the same position

@Soothsayer1 they are lucky to have significant savings.

My cousin lives in Switzerland. Tax is different in every canton. Property is scarce as it is a small country …. (A bit like here…) You pay capital gains tax on disposal of main residence at a sliding scale (lower percentage if owned for longer). To avoid people flipping properties and investing too much in property. You also pay a notion of “own rent” - the bigger the house, the more you pay, even if you own. You then get deductions for the amount of people who live there. So it is an extra bedroom tax but bites on size and value of property. Rental laws are much more protective towards tenants, landlords are on the whole more professional outfits.

People need to remember that the Capital Gains Tax on Main Residence in the UK is a huge exemption windfall tax. That could change at any point. Many elderly folk have equity in houses and inheritance tax doesn’t necessarily apply because they are below the threshold. CGT rules could change over night and apply when a family disposes of a dead relative’s property. Lots of my friends have made thousands upon thousands on property disposals - the government could easily make some money there. If you reinvest straight away then it shouldn’t bite. Only at the end when downsizing not when moving up.

Housing developers are not charities. They are not obliged to build expensive bungalows. They take up too much land in a country where land is precious. Around me, we are not allowed any new builds! Green belt and AONB. It’s the job of housing associations to build for the community. Or charities. They won’t build for down sizers, so we don’t have new bungalows. It’s economics and politics!

Well they need to be directed to do so by laws or the government then.

Because until they do, I’m not leaving my house. I want a bungalow because of the stairs. So unless this is sorted by legislation, older people will continue to ‘bedblock’ their family homes.

If land can’t be found, then the housing market won’t change.

No they should not. We are not a communist state. If developers want to build bungalows they will. As they are so expensive, they are a problem for buyers as well. Also down sizers have homes. We are trying to build for those that do not. If charities wish to build bungalows, fine. Like everyone else, you have to pay a premium for a bungalow or get a housing association one. Pressurise your MP and Council so they ask the housing association to build them.

How do you think more land should be released? More green fields? We don’t build anywhere near enough homes and our targets are always missed. There are going to be 6 starter homes in a nearby village built by a housing association to meet need. No bungalow. Maybe instal a stair lift?

Here the 3K is more or less their monthly Social Security (national pension) (for a couple). Here it would be twice the monthly state pension for a couple.

Costing 1.5k a week currently but you get what you pay for
OMG, how can anyone afford that on a pension??
You can’t, so you fall back on SS who say “it would be cheaper for us for you to be in a care home”

She did briefly consider leaving her village, however the places aimed towards the older generation which were flats, were priced around the same as her house is worth, then there are huge, HUGE maintenance fees which do include some sort of pop in service, however not something they could afford. Basically this. For most people, downsizing won’t produce a life changing amount of cash. So you’re asking people to take a big downward step in their quality of life for little benefit.

It’s not as simple as supply and demand. Developers’ decisions are based on selling at a certain price, so new houses are released at a rate that won’t depress that price. In 2019, almost 400,000 homes were given planning permission in England, but only 240,000 were actually built. Over a 10-year period, from 2009, 2.5 million homes were given planning permission, but only 1.5 million homes were actually built. That translates to a backlog of roughly 1 million unbuilt homes.

The problem we’re finding is that though we certainly want to downsize in a couple of years, we don’t want to go from a family home with decent sized rooms to an overpriced rabbit hutch. Lots of modern flats, which is what we want, are tiny.
Most of the smaller properties with decent sized, fewer rooms are conversions in old houses with no lift so are no good for us. My husband struggles with the stairs so we may as well stay where we are and avoid the hassle of moving.
Minimum footprint needs to be increased to attract older people looking to downsize.

How's this to be funded? The huge amounts of equity should be motivation enough to downsize, I don't think the over 60s need any more freebies.

This is an option I’ve considered as I have a mobility issue that will worsen over time. But this conversation is about how to release larger properties on to the market for families who need them. I will not be moving from one unsuitable property to another that’s just as bad.

Perhaps we should be incentivising developers to build the kind of homes that we need - and I don’t just mean bungalows. We also need more two and three bed homes, not just the massive four and five bed ‘executive’ homes so beloved by the developers.

Patapouf · Today 09:55
How's this to be funded? The huge amounts of equity should be motivation enough to downsize, I don't think the over 60s need any more freebies“

Which freebies would they be? My husband is 64, we get no freebies from anyone. Just pay lots of taxes and insurance.