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

Anyone qualifies for a council property, you'd just be a lower priority.

If you can get a rental with a good ethical HA or LA which has a commitment never to increase your rent any faster than the annual increase in state pension rate, then that might be ok. Such situations aren't the norm for renters.

From my 20s to my 40s I was made acutely aware by my grandmother how terrifying it is to have no way of increasing your income but every single year the increase in rent is more than whatever tiny increase in income was granted from the state pension. Year by year all the little things that made life bearable had to be sacrificed to make ends meet. She was very stressed and felt vulnerable and unable to control her budget because such a huge chunk was going out every month in rent. Added to which the landlord required rent every 4 weeks so 13 times a year but income came in 12 times a year. That's manageable if you are good with figures and on-the-ball but gets stressful.

It was a very clear illustration that getting to be mortgage free by retirement would make a huge difference.

As a home owner your dad can readily sell any difficult-to-maintain properties and buy a modest retirement flat if he wishes - many such flats exist in developments where all maintenance is dealt with by a management company. He'll still be a lot better off than renting.

If you have the option to get a HA house then yeah it might be a good thing.

That said they're extremely rare where I live and the waiting list is extremely long. I'd be dead before I ever got the keys to one.

On the basis of that I would not want to private rent from a traditional landlord in old age. Having to wait for a landlord to fix things or worrying about having to move because tenancies might not be long term or pay rent that has no cap isn't how I want to live my retirement.

I'm happy to own, happy to have security and happy to have something to pass down to my son (or pay for care if needed).

My husband and I are the only ones in both our families to actually own a house. All our siblings rent. We were never really encouraged to own but felt it best for us and our situation.

If you can get a rental with a good ethical HA or LA which has a commitment never to increase your rent any faster than the annual increase in state pension rate, then that might be ok

HAs and LAs are told what rent rates to set by the Govt.

I’ve lived in HA & I couldn’t believe the number of people who’d done this. Even more shocking was that they walked straight into these properties, no waiting list for them. This wouldn’t be allowed at one time, but now they just want the accommodation filled.

People saying that you'd never get a HA place are confusing general housing with those flats and bungalows restricted to the over 55s. In many areas these were never part of the right to buy scheme and hence are fairly plentiful. Anyone can bid on one and the only criteria tend to be age and location. You aren't competing with families for these places. I have known working 60 somethings get a place without too much of a wait.

Yabu. There is no security in renting whatsoever. Nobody wants to be turned out of their home every 6-12 months (or have to deal with rent hikes) in their old age. Especially if you are reliant on your local community for help or socialising (or have dementia and need to be in familiar surroundings).

Add to this the low standard of rental housing (damp, mould, disrepair etc) and the restrictions on tenants (no ability to make modifications or decorate without the landlords consent) and renting in old age is a terrible idea. It would have major implications on a persons wellbeing, health and finances.

Of course, all the above could be fixed with with an overhaul of our tenancy laws, was there the political will. In the current system though -bad idea.

The over 55s HA places tend to be secure tenancies and allow you to decorate etc. The usual private rental pitfalls do not apply.

Wow- so even if someone has a million quid in the bank, they could still apply & eventually get council housing? I'm seriously shocked and surprised by this.

Why?

It's hardly going to be a common situation. In the areas where demand is highest, they're not going to get to the top of any waiting lists because of the criteria being so narrow. Really it's only going to happen if there isn't much competition for a particular property, in which case what's the issue?

Yes technically. There's no guarantee they'd ever get one though. They'd be put in the lowest band and there will be people constantly added to the list that will skip ahead of them as higher priority. In my local authority there are 5 bands - A+, A, B, C and D, with A+ being the top priority (usually vulnerable homeless people at serious risk). A wealthy person living in a suitable accommodation would be put in band D. In my area people in band C are occasionally offered properties, if nobody in a higher band bids for it or if they're unsuccessful. I've never heard of band D being offered one. It's not impossible though.

Thanks for the explanation 👍

What if the demand for houses increases, and the economy declines… and rules change

They can't change secure tenancies that have all ready been issued. Otherwise they would have done it long ago! New tenancies are different. They can put what they like on those.

I have a secure tenancy with a HA and there are limited scenarios in which I could be evicted, but I cannot be forced to downsize. Doesn't matter how much I earn or how few people live here. As long as I live here, I can stay.

As far as the rent goes, once I'm retired, either HB/UC will pay it or I could rent out one room at the same cost as my rent for the whole house (in a good area in London). So I have no worries about that. As OP points out, no maintenance costs.

I did a mortgage calculation on my house a while back out of curiosity. It would cost me 4k a month! I don't even earn that per month after tax. Needless to say my rent is far far lower! So ultimately I couldn't live where I do now if I didn't have an HA tenancy. So what a pp said about having more choice if you buy, isn't necessarily true in all cases. You can only buy what you can afford. Whereas if I wanted to, I could exchange (which is what I did to get my current house).

So to answer your question OP. If your partner has a secure tenancy then yes it would make sense to move in with him from a financial perspective. My only concern would be that you sell up, spend/pass on the money then you and he split up and you're stuck with nothing. So you'd have to pretty confident that won't happen.

@Ihateboris not necessarily - waiting lists don't function on a "time you have been waiting" basis. A millionaire would always be bottom of the list and new entrants to the list would go in as higher priorities every day. The millionaire would literally only get it if every higher-priority person turned it down. This simply wouldn't happen.

Absolutely no issue at all- just surprised. Like you say, they'll be on the list for a long time, and other applicants take priority.

I didn't think you could just sell a house and get a HA property? I thought you would be expected to use the money to pay for and find your own housing. Personally, I'd rather have my own mortgage free house. Surely what you save in paying rent you can spend on trades people if the need arises?

Sorry OP but this doesn't make sense. We paid our mortgage off at 51, retired and have saved £700 a month since. The maintenance is so minimal as to be nearly zero. More to the point, we can't be section 21'd, we have security of tenure and we have much larger savings. Any large unexpected issues are covered by insurance.

I honestly think private retirement apartments/complexes need regulation to ensure they are better propects for us and the country. If that were the case, and I could sell my house and use the capital to fund rent for an apartment in a complex, where there is emergency help onsite if I need it, where most the maintenance is taken care of, where there is the added security that comes with living in a community and where there are people I can socialise with (if I want). I would do it.

We need to make sure they are secure homes for people, and the owners cannot just sell it or shut it down etc. Or they could be built and rented out by a competant government (but we never seem to have one). If they were, they could provide a much needed option for (some) people as they age, which frees up housing and which provides them with support and friendship that helps them live a more independent life for longer.

My aunt and uncle have lived in a HA property for over 30 years, they've always paid the full rent (ie no housing benefit/element) which although below market value is still a fair amount. Over the years they have paid at least £100k over what the property is worth in rent, not to mention they would have paid the mortgage off a few years back and wouldn't be paying anything now as well as getting a return when it was sold. That amount doesn't amount to the cost of repairs etc.

Certainly pluses and minuses to owning and renting but personally if you can pay a mortgage off its much better as you or your children gets that investment back or you can afford choice over your care home.

In theory they might not be waiting long, if they choose an unpopular property in an area of low demand. Easier for the elderly than anyone else as there are properties specifically for that age group. But I really doubt it happens much.

Perhaps the lesson here is less about renting and more about considering your housing options and downsizing to something smaller and perhaps newer well before you 'need' to.

I think many people leave it too late to be able to move.

I've seen threads on here from people who never intend to fully pay off the mortgage and move once the kids have left home or are out of the expensive school catchment. There may be something in that.

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.

"...security for life..."

@anthonybourdainsfurrowedbrow

Optimistic at best, more likely extremely naive...

I mean, I absolutely think they are taking a HUGE gamble. I think they believe its like how it was in the 90s when it was relatively easy to obtain HA - when my parents divorced we were given a three-bedroom house within two weeks.....

You won't get Social housing for 2 reasons.

1. If you have substantial savings from selling your house . (If you buy and then sell when you are older )

1. There is very very little about and will instead be at the mercy of the much more expensive rental market with absolutely no security from being evicted without cause. (The legislation to prevent no fault evictions has more holes than a leaky colander )

Have any of these people who want to take this approach or the family members who applaud it actually lived in SH? Do you know how it has changed over the decades?

I lived in a council house form birth until I left home at almost 21. My parents have always lived in SH until my mum's death last year and my dad's entry to a care home. No way would I choose to give up my owned mortgage free house with all the choices that gives me and throw myself on the mercy of housing associations.