The Downsizing Dilemma: Why the government needs to up its game

Plans to offer financial incentives to encourage people to downsize in retirement are 'politically toxic' and 'insufficient in the face of the scale of the problem', argues Stacks' chief

The government’s long-awaited housing white paper, due out next week (fingers crossed), is expected to offer financial incentives to encourage people to downsize in retirement; James Greenwood questions the thinking behind the idea and offers up some advice for those dealing with the reality

This is a politically toxic move on the part of the government and is insufficient in the face of the scale of the problem. Many people would take the view that the older generation who have too much space should be penalised by inflicting a spare bedroom levy, rather than incentivised to move somewhere smaller.

The reality is far from simple. In our experience, it is rarely finances that is the obstacle to downsizing. More significant are a fear of change, a reluctance to deal with the hassle, and indecisiveness as to what to replace the existing home with e.g. a failing to grasp the nettle and get on with making the move.

For those who are influenced by finance, releasing capital by downsizing to something smaller and cheaper, is generally incentive enough.

There are of course numerous side-benefits, and we would encourage those empty-nesters who anticipate downsizing to start thinking about it early, not to put it off until the need has become urgent. There is a huge amount of planning and researching to be done, and this can be achieved better where there are minimal time pressures. It’s also easier for the younger old to make new social networks.

For those who are influenced by finance, releasing capital by downsizing to something smaller and cheaper, is generally incentive enough

My advice would be to consult the family at an early stage – there may be issues that affect your decisions that you are unaware of, and if all relevant parties are aware of your intentions it prevents problems arising at a later date. But try to be resolute and put your own needs first. Advantages to downsizing are often only fully appreciated after the move has taken place. The improved lifestyle, proximity to family, amenities and transport, decreased maintenance issues, and improved or specialist ergonomics can be incredibly liberating.

In many cases, children find themselves playing a major role in the house moves of the older generation. House selling and buying has changed dramatically over the course of the last decade, and homeowners who have been out of the cycle for many years may be unaware of some of the issues that apply today. They may not have access to computers, they may be unaware of recent taxes and expenses involved, and they can find themselves struggling to make the best decisions. Often downsizers are widows who may never in their lives have dealt with the sale or purchase of a property.

The most important consideration for downsizers is how they want to live – think lifestyle needs as opposed to the kind of property. Look at the issues surrounding the move – financial, geographical and practical, and make reference to the future. The best thing to do is to get out and look at property, don’t restrict your search to the internet.
More downsizing tips:

It’s possible that you may not have sold and bought property for many years and things have changed dramatically over the decades. Taking advice will ensure that you are supported every step of the way.

Don’t just consider your needs as they are at the moment, make sure it will suit you, or can be adapted, when you become less active and possibly less mobile. But psychologically, think of this as a new step forward, not the last property step – a feeling that can often deter downsizers.

Before you start planning the ‘what’, establish the ‘where’. This is by far the most important aspect of your move. Moving near family is frequently a sensible move, but don’t discount the fact that moving away from an established social life will be wrench. Consider the demographic of the new area.

Remote tends to be a bad idea in later life

Make sure you have the facilities you will need close by. Remote tends to be a bad idea in later life. You need to have easy access to necessary facilities and leisure facilities that will enhance your life. More and more retirees are choosing to live in towns and busy villages, and a central location, within walking distance of everything you need day to day, can be a great choice.

Don’t overlook practicalities that might become necessary later in life such as security, porterage, off street parking that’s easily accessible from the house and minimal steps.

Try not to recreate exactly what you had on a smaller scale. Think of it as a new start and an opportunity to live in a different way.”

Finally, don’t rule out the possibility of moving on-site with family. Some of the most successful arrangements are where grandparents have an annexe or separate accommodation. Support works both ways, both practical and social. The best arrangements are where each family unit has its own access, is self-contained in terms of kitchen and bathrooms, and where living together etiquette is established early on!

James Greenwood is Managing Director of Stacks Property Search & Acquisition

stacks.co.uk

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