To think renting in old age is a wise move

[Forthelovagod]

So I've had a mortgage since I was 21. My Dad drummed it into me that rent was dead money, that if I could afford to buy then do it.
My whole mindset since then is get mortgage free ASAP and this will help make things affordable in old age.

My parents are now elderly and my Dad has now changed his thinking. Feels the burden of his mortgage free home due to ongoing maintenance stuff and reluctance to trust tradesmen. He tells me now, rent, get a HA property if possible, that there will be less worries in my old age. His friend is in HA accom, think he wishes he was too

Is this crazy thinking? He is certainly not as sharp as he was but part of me sees his point.
Aibu to think that those in secure rented accommodation in old age may actually be in a better position.

Now considering that once my mortgage is paid maybe sell my house and give my dc some money for their futures and see them enjoy it rather than wait till I die..... Aibu to think my Dad may have a valid point

Absolutely this. I have seen some of the absolute dire facilities that some older people have no choice but to go into. Complete hellholes.... and I have seen the ones that are paid for with equity and I tell you which one I would prefer to be in.

I think this is thw worst idea ever. You have zero security and you are vulnerable. My FIL in his 80s chose to do this and he's already had to move twice, it's been very stressful for him and his (evil) wife

Dmum, 83, is renting a retirement flat. She sold her house and has that money in the bank. Her rent is £750 a month but that includes the £350 service charge you have to pay if you own one of the flats. They are hard to sell and don't really keep their value so we were keen to avoid buying. She has no worries about security, maintenance or bills beyond council tax and electricity. She has a gaggle of friends and they all seem to support each other. Makes complete sense

No, bad move.

I don’t think this is a good move but maybe it would be for some people?

hard to know really- we might all be under water by the time I retire!

How does that work when virtually all care homes are privately owned and only about 4% of the population ever live in one?

I think your dad’s judgment is a bit impaired by age @Forthelovagod.

And yes, the entire proceeds of the family home are tucked away to pay for really good care, should she need it.

You won't necessarily need a care home

It may not take all the equity

If you rent, you'll pay out the same money, give or take, and won't have any equity.

@SlightlygrumpyBettyswaitress I totally agree. I cannot persuade my FIL to have a flat though. If they were small bungalows with a small garden in a nice area he would be in one tommorrow!! He is considering a park home though in a lovely area and mentally writing off what he pays for it, will still have lots of equity and has told us he would rather pay for help at home if he needs it. (He's 83 at moment but fit and fine)

Renting a retirement flat, when older is a good idea. My gran did this, she sold her house had money to go on holidays and a secure and nice flat which she never had to move out off, only spent the last few days in a hospice.

However only ever renting is pants in this country. HA house do not exist in the same way they once did, you can only rent them now for x number of years and if you have a better job things improve they expect you to move on. There are no longer lifetime rents avaible like there used to be. (Yes there will still be people living in them but once they are gone they won't be offered for lifetime rent again). Private renting is even worse as you often end up moving regularly as landlords either want to decorate without tenants in or put up the rent. It's to much hassle, if we had longer more secure renting like in some EU countries then maybe, but the government has made home ownership in the UK a priority. The renting market is not protected enough.

Most retirees are on a fixed income. I wouldn't rent the way rents are going.

There are pros and cons like everything else. People seem to look down on renting but there are many positives, especially as you get older.

I bought when houses were cheap (20+ years ago) but it's not so straightforward now due to price and interest rates.

Everybody's stated the negatives but some positives:

Liquidity.
Flexibility.
You're more likely to live in an appropriate sized property and have less hassle downsizing.
You're more likely to have fewer personal possessions due to the potential for moving.
You'll be infinitely more mobile.
Inheritance, if you're passing money on earlier.

Depends on what you value. Draw up a list and go from there.

Housing associations can be hit and miss and there have been many changes in the rules over the years that it's unstable ground, but I get the ideal and there are almshouses and other supported housing which might be more suited for some in old age.

There are other options like trying out home help and supported living at home services. There are some that helps with both home maintenance needs and basic care needs. With my disabilities, I started trying out some in my thirties and found one I'm very happy with. I think getting that kind of help in place sooner really helps as there has been a lot of discussion around difficulties adjusting to it as people age.

I can see his thinking, property maintenance on a state pension only would be tough and I'm glad my parents and grandparents are in HA otherwise they'd be stuffed, but, the government could change things in the future. HA properties may no longer be secured tenancies, or you have to downsize etc when dcs leave etc.

Private renting - no way! I've had good but also some very bad experiences there.

I think a HA property is the best position to be in tbh. Mortgages are steep & no guarantee you'll always be able to afford it. In my parents case, they simply can not afford to maintain their property and this happens time and time again with elderly people, as they have aged they just stay because they haven't got the energy to move especially to purchase another property that may or may not then need maintaining anyway along with affording all the costs that moving entails.

I agree with him - my own parents are taking this gamble, because they have older friends who gave been granted HA housing and its security for life with little to no maintenance needed.

My aunt is also planning on selling her house when she is older and using the funds to rent a flat in a sheltered accommodation type set up.

It's a gamble. You have no security, and the way things are going, no one can predict what your rights will be in a decade or 2.

@FarmGirl78 I used to audit for care homes. The full fees are so so much more than the government pays. Effectively private care fees subsidised the cost of government funded places in care homes.

At least it did for the various homes I had to audit. No one was treated any differently for being private vs public funded?

My grandparents sold their house once they were in their 70s and rented a retirement flat for the rest of their lives. Seemed like a good option. No maintenance to worry about, every apartment was designed with potential mobility issues in mind (wet room, no bath, etc), regular social activities.

Much easier for carers too. In her later years my grandmother had a carer who helped her shower and get dressed in the mornings. After helping her the carer would visit half a dozen other people in the same building. Very little to no time wasted traveling between properties.

If you don’t own a home then you’ll be eligible to move into an over 55s HA rental. These tend to be pretty nice and some have care available, cafes, social events etc. It’s a really good option for old age.

Don't they cost a fortune to rent though? There's one or two near us, would love my DF to move in to one!

We know some people who've sold up and now rent. This liberates cash to help get their kids on the housing ladder.
What they have in common is that they have good public sector pensions, so they know they'll be able to afford their rents. Otherwise it's a gamble.

And the 40% inheritance tax on death

My lovely lodger became my lodger when the landlord owner of his house decided to sell the property. He’d been a model tenant for 8 years. That alone would make (unnecessarily) renting a place a very bad move. Nobody can evict you from your own unmortgaged house.

But the government doesn't receive the money?

The care home does. Of which many are private. Some are local authority, but the costs are much lower. It is still a lot of money, but they have huge expenditures.

Granted, some of the expensive care homes can turn a large profit. But these are private companies. The government doesn't benefit.

OP you would be better off retaining the mortgage and sensibly downsizing to an easy to managed property when the current one no longer fits your needs. Easy to maintain small purpose built flat in a modern building to see out your last remaining couple of decades - simple.