Earlier this year Saga[i] called for older buyers to be able to downsize without paying stamp duty. Saga conducted research and found that 73 per cent of over-50s would support one stamp duty free move for those downsizing, up from 70 per cent in 2017.
Another poll last year by YouGov[ii] found that 22 per cent of over-65s would consider moving house if stamp duty was abolished, potentially freeing up millions of homes for younger families.
Unfortunately this doesn’t look likely to happen any time soon. This means people who want to downsize and move to a popular retirement hotspot could be facing a hefty stamp duty bill.
Southern coastal counties such as Dorset and East Sussex along with many towns and cities in the south east of England can command high house prices, even for smaller properties. Stamp duty can therefore take a sizeable chunk out of any capital left from a house sale.
There is a solution though and that’s to downsize and rent in a specialist retirement development, instead of buying. At Girlings Retirement Rentals it’s something we are finding more people in their 60s, 70s and 80s are recognising can have many benefits.
One of the main benefits is that they can keep hold of the money they make from selling their house. They can choose to invest this, spend it enjoying their retirement or give some to family, rather than having it tied up in bricks and mortar.
Obviously there is rent to factor in but we have rents to suit all budgets so it can make financial sense to free up capital in a home and rent instead.
For some having the peace of mind that they aren’t leaving their family with the burden of selling their home after they have gone can be a real relief too.
We’ve found over the years that one of the barriers to renting, especially for someone who has always been a homeowner is the fear they may have to move all the time.
This can be the case when renting privately, but with our retirement developments Girlings offer assured ‘lifetime’ tenancies.
This means people have the same security of tenure as if they owned their home and will never need to leave, unless of course they choose to! Once people realise this, renting often becomes a realistic option for them.
Another reason to rent is people don’t have to worry about the upkeep and maintenance of a home. As we get older looking after a large house and garden can become burdensome. With a lot of rooms to heat it can also be costly to keep warm.
We find many older people are favouring smaller apartments when they downsize which they can look after more easily. It enables them to focus on enjoying their retirement rather than spending time on housework and gardening.
The heating costs are also reduced which over time can be quite significant, as well as other bills such as water, electricity and council tax.
Most retirement developments have the benefit of a 24 hour emergency call system in each apartment and an on-site manager to help with any issues too. It’s reassuring for older people (and their families) that there are people on hand should they need any assistance.
For those that like to travel a lot renting in a retirement development means it’s easy to just lock up and leave as well, knowing that their apartment is safe and secure with people around.
Finally there is the social side to living in specialist retirement development. There are people of similar ages and most developments have communal lounges where people can mingle over a cup of tea or coffee.
Many also organise regular activities, outings and events which people can join in with if they wish.
Moving and renting can give people a new lease of life in a new location, perhaps somewhere they have always dreamt of living or moving closer to family. Renting can be an affordable way to move to an area which might be expensive to buy in.
If you want to downsize in 2020 and avoid paying stamp duty then why not consider renting? With all these benefits it could be the ideal retirement move.
About the Author / Gareth Hargreaves
Gareth looks after all editorial content on 50connect. He is the Swiss Army knife of content ideas and production.
