Over 60s Should Be Encouraged To Downsize

[Ignitionnet]

Originally Posted by bonzoe

I doubt that it would have the desired effect - price of smaller (starter) properties would go up, surely?

Probably not, people will be wanting to move up the chain increasing supply as they vacate and demand overall will drop as people are in more suitable housing that's a better fit for their families, or just themselves as the case may be.

[danielf]

Originally Posted by Ignitionnet

Probably not, people will be wanting to move up the chain increasing supply as they vacate and demand overall will drop as people are in more suitable housing that's a better fit for their families, or just themselves as the case may be.

Seems unlikely. The houses that are freed up will be taken up by the over 60s that downgrade. A few people will have more space to stack their kids as they upgrade, but there will not be more houses on the market. It'll just be a bit of swapping at the top end of the market.

Originally Posted by Ignitionnet

Probably not, people will be wanting to move up the chain increasing supply as they vacate and demand overall will drop as people are in more suitable housing that's a better fit for their families, or just themselves as the case may be.

I think before the government try anything like this they need to make it possible for people to enter the housing market should they wish to .Lower house prices ,lower deposits ,employment and wage levels all to be addressed first because this whole scheme depends on first time buyers being able to afford to buy a house ,it's no good having a glut of decent houses on the market if nobody is able to buy them

[Chrysalis]

Originally Posted by Ignitionnet

http://www.dailymail.co.uk/news/arti...ied-homes.html



Please do feel free to actually read the story without commenting, in a complete contrast to many of those who commented. The comments on the Fail you'd think they were on about frog marching people at gun point from their homes.

My thoughts - good idea, some will want to downsize and would rather save utility payments, etc, but the tax system prevents it. The supply will ease pressure at the higher end of the owner-occupier market thus easing it further down the chain.

Then a further shortage of 1bed/2bed properties after tho (already a shortage). It just moves the problem from part of the market to another, although I agree 'if' they losing money downsizing its silly.

---------- Post added at 19:31 ---------- Previous post was at 19:30 ----------

Originally Posted by martyh

I think before the government try anything like this they need to make it possible for people to enter the housing market should they wish to .Lower house prices ,lower deposits ,employment and wage levels all to be addressed first because this whole scheme depends on first time buyers being able to afford to buy a house ,it's no good having a glut of decent houses on the market if nobody is able to buy them

indeed. To help address that there probably needs to be a cap on buy to let of some sort as well, and regulate that more as well.

While i see what this is intended to do i have my doubts it will work given how the property market right now operates. In theory yes vacating larger homes should enable people to move up the chain but thats assuming they can get the mortgages for them something which is now a lot harder then it was a few years ago.

Second any pensioner selling their 3\4 bedroom house is going to have the rest of their retirement in mind and associated costs so will want max value for the property they are selling see point 1 . This and other measures that are being considered\implemented by this government are short term fixes to a much longer term problem that needs construction not moving the pieces round the chessboard.

As i have said in another thread councils need to start approving houses to be built that are affordable rather then just going for the higher value properties because they then rake in more council tax. There needs to be incentives for independent builders to construct more of the affordable housing so they have a good reason to do that rather then build estate after estate of high value housing trying to maximise profits.

This is a problem we have had for quite a while with no political will in the past to sort it out or plan for it to be sorted and whilst i applaud this government for finally trying to deal with it. I cannot help feel they are going about in the usual shorttermism way we are all too used to seeing rather then the long term approach that is really needed.

[Ignitionnet]

Originally Posted by Chrysalis

Then a further shortage of 1bed/2bed properties after tho (already a shortage). It just moves the problem from part of the market to another, although I agree 'if' they losing money downsizing its silly.

---------- Post added at 19:31 ---------- Previous post was at 19:30 ----------



indeed. To help address that there probably needs to be a cap on buy to let of some sort as well, and regulate that more as well.

There are far more 1 and 2 bed overcrowded properties than there are 4 bed. Absolute worst case the policy reduces overcrowding.

---------- Post added at 14:14 ---------- Previous post was at 14:12 ----------

Originally Posted by RizzyKing

Second any pensioner selling their 3\4 bedroom house is going to have the rest of their retirement in mind and associated costs so will want max value for the property they are selling see point 1 . This and other measures that are being considered\implemented by this government are short term fixes to a much longer term problem that needs construction not moving the pieces round the chessboard.

This vexes a bit given we the tax payer are paying for health care and potentially pension for said people who want to get maximum value for their property, as clearly 3 times what it cost them in real terms might not be enough.

Eek intergenerational rage showing.

Why are European style rent controls never considered?

[danielf]

Originally Posted by Damien

Why are European style rent controls never considered?

European = Bad. It's in the rulez...

[Traduk]

Originally Posted by Ignitionnet

There are far more 1 and 2 bed overcrowded properties than there are 4 bed. Absolute worst case the policy reduces overcrowding.

---------- Post added at 14:14 ---------- Previous post was at 14:12 ----------



This vexes a bit given we the tax payer are paying for health care and potentially pension for said people who want to get maximum value for their property, as clearly 3 times what it cost them in real terms might not be enough.

Eek intergenerational rage showing.

You need to keep that intergenerational rage under control or you may be an early candidate for blood pressure medication

I see my house as a consumer durable with which as I own I can do with as I please. The fact that it could easily accommodate a family in addition to my wife and myself is no more meaningful to me as the fact that the two cars we own could seat 10 (collectively) but neither often carry more than one or two.

The last government interference in the housing market was when either Lament or Lawson ended multiple purchase mortgage tax relief (students, friends etc buying collectively) and gave 6 months notice. The housing market rocketed during those 6 months turned over and crashed. Governments are best kept out of anything involving free markets because they always cause more problems than they cure.

Within the multiple stratas of house prices the only thing that matters to an owner is differentials. People only look to move if needs are pressing and differentials beneficial. I have never given terribly much interest in the value of my house simply because it is a home and as I intend neither to liquidate or use it as collateral, the value is of little interest.

As for down sizing and the stupid ideas by that self appointed think tank. It would take somewhat more than a free ride on a purchase regarding Tax to even grab my attention. In a move that is small change in the final analysis.

I have said it before and will do so again. In a free market buyers bid up prices. As supply is always behind demand and will always be whilst the population explodes the shortage causes inflationary upward forces. The suggested internal movements within the market would skew the distribution downwards in strata and possibly have undesirable consequences at all price points.

There has already been a proxy for this demographic shift in Bath where my sister lives. Properties in London sold to rich foreigners have seen lots of people heading for Bath with a couple of million in their back pockets. House values exploded in Bath as the newly cash rich came to town and where London was silly so now is Bath. Cash rich oldies would also change price dynamics but as the amounts in question are minimal they would inspire nothing so it is a bit of a non story which isn't going to happen anyway.

[Chrysalis]

Originally Posted by Damien

Why are European style rent controls never considered?

Probably because landlords are seen as businessmen wealth providers so our law favours what they want. So in short it would probably be seen as reducing their invement potential and as such a bad idea.

[Caff]

Originally Posted by Taf

The way house prices are these days, we'll all end up with 3 or more generations stuck in one home unable to afford to move. So the rooms will be needed!

Have to agree Taff.

Trying to remove my 2 boys from my house seem fruitless.
One has saved all his working life (10 years) and the other has NO chance.
Neither could take on even my first home. But it might free up properties for those down the chain?

Not 60 yet but would miss my irreplacable garden, view and neighbours.

[Pierre]

Originally Posted by Ignitionnet

This vexes a bit given we the tax payer are paying for health care and potentially pension for said people who want to get maximum value for their property, as clearly 3 times what it cost them in real terms might not be enough.

Eek intergenerational rage showing.

Said people will most likely be tax payers who have contributed to the their state pension and most likely their own personal pension.

Another thing seems to be the older generations benefited from getting there first. Being part of an era where it was a lot more feasible to buy properties as an investment and then watching as limited stocks meant the value shot right up and put the idea of owning a home out of reach of the generations that follow...

Maybe that's just me being blinded by my own personal interest but the whole thing seems immoral and unsustainable. I wouldn't go so far as too tell people that their homes are too big for their needs and they are obliged to downsize but we really should do something about people who see property as route to the rich life and screw society.

[Ignitionnet]

Originally Posted by Pierre

Said people will most likely be tax payers who have contributed to the their state pension and most likely their own personal pension.

Doesn't work that way, they were paying the pensions of then-retirees. This whole idea of contributions isn't the case. It entitles to the state pension, doesn't contribute to its funding.

Personal pensions are, amusingly, being funded via worse pension benefits and backfills from company bottom lines.

We youngsters have it so good yet we get to work longer for less generous pension benefits and subsidise overly generous private ones from the past to boot. Go figure.

---------- Post added at 16:28 ---------- Previous post was at 16:27 ----------

Originally Posted by Traduk

You need to keep that intergenerational rage under control or you may be an early candidate for blood pressure medication

I see my house as a consumer durable with which as I own I can do with as I please. The fact that it could easily accommodate a family in addition to my wife and myself is no more meaningful to me as the fact that the two cars we own could seat 10 (collectively) but neither often carry more than one or two.

An excellent advertisement for land value tax, thank you.

[Ignitionnet]

Originally Posted by Damien

Why are European style rent controls never considered?

Would deflate the asset bubble they're trying to hard to maintain. Take the ability to charge ridiculous rents away and BtL chancers will stop buying as they can't get a return on huge, interest only mortgages which they shouldn't actually have access to in the first place. Given these guys are a big part of the market right now, it's them and cash buyers mostly, there would be a danger of house prices adjusting back towards long term trend and we can't have that.