Calls for Help Freeing Up Family Homes

[CogitoErgoSometimes]

Free Up Family Homes The charity 'The Intergenerational Foundation' is recommending tax breaks to encourage older people to leave oversized homes. They estimate that there are 25 million unused bedrooms in England. Half of over 65's have 2 or more spare rooms in their home. Housing minister Grant Shapps doesn't sound keen on the idea. But what do you think? Should home-owners and tenants be encouraged to trade down for public-spirited reasons? Or should they be able to rattle around in their multiple spare bedrooms and left alone?

"is this remotely affordable?"

I don't what it would cost to waive stamp-duty on house sales for retired people but can't imagine it would be massive. In the mid eighties a housing boom was triggered when double MIRAS Mortgage Tax Relief (any oldsters remember that?) was abolished for unmarried couples buying a home together. There was a rush of couples anxious to purchase before the rules changed and the whole housing market suddenly sprang to life. So it might not be necessary to waive the tax entirely, just reduce it slightly to create a bit of a stir and get people moving.

I think the implication for paying for care outweighs any stamp duty reduction having just seen what it costs to keep fil in a care home.

Have there been any estimated costs?

Whatever revenue is not collected on these sales will need to be made up from somewhere. As with any idea that brings new costs (spending or tax cut) what would be the countervailing cut or tax rise? The public purse has less than zero cash to spare at present.

I'm finding all this slightly dubious. So what if Mrs Smith next door lives in her own large house, while Mrs Jones, who happens to be 30 years younger, doesn't. It doesn't give the right to Mrs Jones to even think that Mrs Smith should move out.

Whats the deal with slagging off the baby boomers? They just didn't spend their money on bling, mobile phones, three tv's per house, endless pairs of nike trainers etc. They didn't go on three holidays a year abroad from the age dot. They invested in their homes. Good on them.

Waiving stamp duty for the over 65s is ageist.

I'm struggling to see how waiving stamp duty would be an incentive?

You pay stamp duty on your purchase not your sale so you mat sell a £600K 6 bed house with 24K stamp duty to move into a £240k two bed with 2,400K stamp duty.

Hardly a huge pull! There is nothing stopping people move other than a lack of retirement specific properties.

I didn't mean to slagging off - just pointing out who the monetary beneficiaries of this policy would be.

Can we afford to give this group a tax break - and what would be the countervailing cut to afford it? It's an important question - in today's economic climate, it's just unreasonable to call for a tax break with no idea how to afford it.

My parents are in their 60s and both have arthritis and "traded down" from a 4 bedroom detached house to a 1-2 bedroom (depending on whether you want to eat on your lap or not) bungalow. The garage was tiny and had no room for all my dad's classic car and bike bits. Mum had to get rid of a lot of her baking gear because the kitchen was too small. I also went and had kids and they had no room for us all when we visited (we live 100 miles away) - we were tripping over each other.

So, they've upsized again to a house with 2 enormous bedrooms with plenty of room for assorted grandchildren to stay over and enough room for them to do the things they love.

So they've only got the 2 bedrooms, but I don't care if they had 7 bedrooms. So long as they can manage the house, why the hell should they be forced to sell up? It's their home. Shouldn't the same go for young, single people who have 4 bedroom houses with enormous kitchens so they can "entertain"?

Stillorsparkling:

You missed option c) a taxed, regulated market, but still absolutely astronomical prices.

My parents are in their seventies and rattle around in a 6 bed house. They shut half of it off.
But it is theirs and they love it and they will stay there as long as they wish.
We have just bought a similar sized house from an elderly gent who is buying a small new build and cannot wait to move out!

I haven't read the whole thread but I also think its a fabulous idea. For the older people who want to downsize but are too daunted by the whole palaver of it, if they could have some impartial practical help with the whole process. I have even thought of setting up a business to do it, and also encourage older people to house-share with each other for companionship and safety. And think of the money some people would suddenly have - enough for treats and proper food and heating. I would love to be involved in some way.

One barrier that disincentivises older couples from downsizing is the way that residential care is charged for: if they keep hold of their big, valuable house, as long as one of them lives in it, the money is not available to the government if one of them goes into a residential home (younger taxpayers will foot the bill so that the older couple can keep their main asset to hand on as an inheritance to their children who are not caring for them or paying for them to be cared for). If OTOH they sell their house, buy somewhere smaller (investing the difference) then those savings are up for grabs as care home fees.

I am not sure what the solution is, mind you - I agree that the currently newly retired generation have had it good - they have gold plated pensions that we can only ever dream of, are capital rich because they bought their houses when they were two a penny and now they have large amounts of care paid for by the young (which won't happen when WE are old as there are too many of us). I am not blaming them for it btw...it's just the way that things have worked out.

Stillorsparkling - and many elderly would stay in their houses to avoid CGT, and would pay the land tax, so nothing would come on the market. I can't see that this would drive the price down anyway as CGT is 18% with a carry forward exemption from the previous year and is paid out of the sale, so you can hold out for the value you want.

Many don't want retirement properties anyway and why should they?

My FIL has two houses, both with 3-4 bedrooms, much larger than he needs, empty a lot of the time, both needing a lot of maintenance and upkeep. He lives alone.

We have tried to encourage him to move into a smaller place with facilities for the elderly near one or other of his sons, but instead he insists of staying put as he can't be bothered to organise his possessions and he doesn't want us to do it for him because it's 'hassle'. In the meantime, we are really getting quite stressed running him to medical appointments, being there when he has a fall, trying to organise home repairs at a distance and so on. His 'hassle' has effectively become our 'hassle', only we are not retired, have full time jobs and several children to worry about as well, not to mention our own house and a number of other elderly relatives without their own children to support them, also in similar situations. Added to which he is bloody miserable living alone, which he rather takes out on us sometimes. I can guarantee that two or three times a week I finally try to sit down to my hot dinner when the phone goes with an 'I'm so lonely, I just wanted to hear a voice' call, to which my response is along the lines of 'Well it's been a couple of weeks since we saw you, would you like to come to stay for a while' only to meet with a response such as 'Well the meter reader might come this week so I had better not leave the house'. That kind of thing.

This is the reality - without an example being set, or positive roles being put in place so that elderly people are persuaded that it can be in their interests to move into a smaller, more convenient and more pleasant living situation, then the situation is rather stuck. Families remain squashed and the elderly remain lonely and inadequately cared for in many cases, despite everyone's best efforts. Not only should they have financial incentives to live in smaller homes, for example by fiddling with the Council Tax system a little, but they should also receive practical assistance in making a move, if they feel they would benefit.

There's another huuuge issue that will affect not us, but our kids - the deterioration of housing stock.

Like it or not, the old aren't brilliant at looking after property - a garden going to seed isn't so much a problem, but houses slowly falling down all over the country is a biggie, because we haven't got enough bricks and mortar standing in the UK anyway.

Added to this are the pensioner buy-to-letters who tend to treat property investments as shares - simply cash the cheque but don't do much upkeep/improvements.

Houses need regular maintenance or they start to become uninhabitable. But property ownership is becoming ever more exclusive to the over-40s or OAPS.

Everyone has ignored the point I made earlier in the thread that one of the reasons for the shortage of housing is people having second homes which are empty a lot of the time.

There are also many homes which are empty and not for sale or rent.

This should be discouraged by the tax system.

I don't see why there should be a stamp duty tax break for downsizing baby boomers. If they are downsizing from a 500,000 house to a 300,000 one they would have plenty of change to pay the stamp duty. The larger amount of stamp duty would be paid by the buyer of the 500,000 house.

If the government really wanted to make property more affordable they would raise interest rates. This would encourage the older generation to stick their money in the bank rather than property and would hopefully mean house prices would fall slightly.

How about the oldish couple at the end of The Mall doing a swap.

I really get sick of this " slagging of the crumblies" culture that keeps rearing it's ugly head on MN.

People of my mother's generation who are now in their 70s and 80s usually spent most of their lives scrimping and saving. As children we never had foreign holidays, we wore hand-made or knitted clothes, we had ONE pair of shoes per season (winter/summer), my father did all his own car-repairs and household DIY, everything was cooked from scratch, we never ate out. Our TV was a second-hand black and white model until 1975. My parents never went into debt or bought anything on credit. Nothing was ever bought unless it was essential. And we were a relatively affluent middle-class family.

We solved the problem of my elderly mother in living on her own in a large house she couldn't manage but wouldn't leave, by moving in with her.

Frankly it would be labour that suggests this and don't get me started on Teresa Jowell... Bet she doesn't volunteer to do it herself and give up her 2 houses first. She's definitely in the right age bracket looking at her.

I shall be like Miss Haversham, should I be able to afford a nice house of course at some point in my life, and refuse point blank to leave!

I think that a lot of it's cultural, and down to experiences and expectations. If you see your friends retiring and moving to condos in Florida, you're more likely to move to one yourself - you can see the advantages, and how well it would work for you. Plus I do think that flats in the US can be much better designed than in the UK. On the other hand, people in the UK feel they need to have enough spare bedrooms for children and grandchildren to stay, so they need to keep hold of the family home, especially if they do a fair amount of childcare for grandchildren.

We're currently letting our 4 bed house in the UK and renting a condo in the US - and it really does have so many advantages that I imagine would suit an elderly couple down to the ground. No stairs, easy to keep clean, easy to keep warm, no maintenance, tennis courts and swimming pool on site, etc etc. DH adores it!

I am FASCINATED by what will happen to middle-class areas in London like Fulham, Battersea and Hampstead in 20 years' time.

The residents in these areas now are a mix of pensioners who have lived there for 40 years (bought when the areas became 'gentrified' in the 70s) and the more youthful, often foreign, rich, who buy or are housed by their banks sorry firms.

A lot (most) of the council property was sold to owners in the 80s. Then sold on to people with rich grannies. Not that many landlords, given the vast rents they can get, take social housing tenants - they let to bankers.

My parents' Battersea street has 60 houses and 6 flats. There are 4 under-18s in the street (well, 2 live at Eton, 2 in the nick). 6 people work, 4 of whom are bankers, one surgeon and one, I am proud to say, is a duke's daughter who works every moment God made. Everyone else is over 70... how long are these areas really going to stay desirable for?