Legal & General Chief: Pensioners Are Stuck In Oversized Properties Worth £820Bn

[winkie]

That has always been the smart option rather than selling up in the UK and punting on a foreign house purchase. However, it still requires more capital and income than most pensioners possess, and even small bolt holes in some parts of the UK are eye wateringly expensive, particularly when moving costs, maintenance charges etc come into play. Perversely the excessive cost of housing in the UK works against mobility in the market as many people simply balk at the prospects of handing over huge wedges of cash to the parasites (private and state) who want to take a big cut of any higher value property sale or purchase. It is these latter groups who have the biggest vested interest in HPI as their rake off increases as prices go up. Obviously, they would benefit from more churn which is why the government is so keen to kick the FTB market into life via taxpayer payouts. Nonetheless, the last few years suggest they can live with low volume just as long as prices keep going up.

It is worth bearing in mind that in periods of HPI it is usually the flats at the bottom of the market that get most over valued and that are likely to be the hardest to shift in a housing bust. The best time to down size from a bigger to a smaller property is actually in a HPC particularly if you are buying a flat since that is the time the differential between houses and flats is most marked . Anyone who had the misfortune to own a small flat during the early 1990s HPC will know they were particularly hard to sell. I would imagine there are some potential downsizers who got burnt then who are very wary of going back into buying that class of property particularly when prices look overcooked.

Very true, but very often depends where you sell and where and what you buy, or not sell at all and allow your family to live there covering the outgoings.....or as very many already are doing sell and add a self contained granny annex/ extension onto a son or daughters property......

[Mrs Bear]

also downsizers into flats are put off by:

excessive charges (can be £2k a year)

no garden to potter in (balcony if they are luckY) and 'communal grounds' are not the same

if they opt for a small house/bungalow instead - there is often not much financial advantage (have you seen the price of 2 bed bungalows in 'bungalow land' estates? )

what 'older' people want is an easy to manage home and garden in a nice quiet area with health centre /shops near to hand and at least 2 bedrooms (one for visitors)

I looked at some retirement flats with my mother. You got the impression of an 'oh, this'll do for old people' attitude - small windows, often too high to see out of if you were sitting down, poky feeling rooms, very little storage. She had already downsized once, from a 4 bed to a considerably smaller 3 bed in the same road. None of the retirement flats impressed her, and the very hefty service charges were another minus.

In the event I was very glad she stayed put. She eventually developed dementia and had to move to a care home. Her house sold very easily, whereas retirement flats can often be an absolute bugger to sell, and you still have to pay the service charges in the meantime.

Edited June 2, 2015 by Mrs Bear

[StainlessSteelCat]

Yes, retirement flats are a real con. I've occasionally thought about getting one for my parents, and that I can live in myself when I'm too old to live in a 3BR house. But the service charges and other restrictions are ridiculous - and the quality/location of said flats horrible.

As it is - I'll likely stop in the average 3BR house we have as long as possible - and perhaps offer a room to rent/wage in exchange for a bit of help if it gets unmanageable. Realistically, I don't see why it should for a good long while as the neighbours are approaching their 80s and doing OK with theirs.

[olliegog]

I looked at some retirement flats with my mother. You got the impression of an 'oh, this'll do for old people' attitude - small windows, often too high to see out of if you were sitting down, poky feeling rooms, very little storage. She had already downsized once, from a 4 bed to a considerably smaller 3 bed in the same road. None of the retirement flats impressed her, and the very hefty service charges were another minus.

In the event I was very glad she stayed put. She eventually developed dementia and had to move to a care home. Her house sold very easily, whereas retirement flats can often be an absolute bugger to sell, and you still have to pay the service charges in the meantime.

+1

exactly - there needs to be more thought put into houses for 'elders' than just assume - apartment, resident warden, laundry room, small size, communal garden/lounge. they are a cut above care homes but as you say - a bit of a millstone to get rid of.