Plan to help the elderly downsize: what the tabloids won't tell you

Could the tax situation make this a non starter?

Would the rental income be taxed - leaving the residue to pay the outgoing rent.

I am an old man living in a large house on my own. I do not want to sell as I like my house and garden. If I had a lodger I think that me and my house would be more secure. There is plenty of room. But in this modern rip off society where if anyone has an opportunity to charge you if you cannot avoid it

if I give a home to someone my home insurance will be heavily loaded despite the increased security given by having another person in the house.

Bob the electrician.

This sounds like a badly thought out scheme to me which will appeal to almost nobody but would suite a few. I have given no thought to the tax position but it is hardly credible that the government will not seek to gather more tax from the rental income, they have yet to reduce the size of parliament to refelect the fact that we are no longer an empire have been supporting far too many politiceans for far too long and are all thoroughly fed up with their inability to do anything well except for wasting our money, at which they are supremely effective.

To bo totally honest who in their right mind would like to hand over their house to a council that can not control the tenants they have in council owned houses now.There are only a few socially owned houses in the tiny little town where I live but one of these three bedroomed properties is let to a family with I believe 5 children but there are at least 12 people living there & the council dose nothing about it. So I say dont listen to these people who cant be bothered to build more social housing it is a bollocks.

FreeSpace... Linton, I think the name is more about freeing up space than being free of charge ...cheap jibe.

The devil is in the detail and we don't yet know enough about the financial implications. However, if it was trialed in Redbridge, then all such issues will have been addressed. You must have (access to) those facts, so why not publish them and encourage a conversation which would carry real value for anyone considering this.

My mother considered Equity Release some years ago but we persuaded her it was unnecessary. She is now ill, immobile and at least an hour from any of us, but she likes living where she is. Maybe this could be good for her.

Why is it always the easy targets, the old and infirm that have to pay for these bloody wanxxxx bankers? They get rewarded for what they foul up. How about some of those renting their palaces out. I can see the queues in a few years time for mandatory euthanasia for over 80s. That would solve their problems.

Roger

The demographic targeted by this silly idea was the very one which benefited from the banking luncay. Reckless lending was the fuel on the HPI fire and those at the top of the housing chain were the only real winners.

It is those generations behind who will pay the real price.

This is just another crackpot scheme, from a Government that isn't one iota different from the last rubbish.

Where do these politicians come from outer space, because they are certainly alien to sane thinking?

Sound advice (whatever your age) would be to NEVER allow any house you own to be managed by an intermediary organisation over which you do not have considerable control.

Using a (carefully selected) letting or managing agent whom you pay, and therefore can hire or fire, is an arrangement that can work for some property owners, though generally you still have to be fairly 'Hands On' in supervising things.

Passing a house to a third party to manage is complete folly, the owner (or in the suggested case perhaps the owning family) MUST retain control at all times.

Letting is a complex business requiring professionalism and constant attention to detail. Far too much can go wrong (and then get worse) if you are not in close control.

The FreeSpace idea is, in three words an impractical and unworkable fantasy.

We have one million empty homes in the UK; some new and never sold, others are established homes which have been left unoccupied long term. Devising active programmes to get these houses refurbished and into use, with the agreement of their owners, is a goal we should be pursuing straight away.

'Bedroom blocking' ???? what on earth does he mean by that? If you choose to buy a house and not use all the bedrooms that is your choice. Period. What next...en suite toilet blocking? Pure Stalinist language if ever I saw it.

It is the demands created by unlimited immigration from the EU,that has caused our housing problem(any many others).

The politicians must address the real issue

We live in an Alice in Wonderland world in which common sense is largely absent in our political leaders of whatever political hue! I have twice had to check it is not April 1st.

There is already a simple but seeming little known scheme which should go a considerable way to 'unblocking bedrooms' called 'Rent-a room allowance' whereby one is able to receive £4250 tax free per annum from a lodger or paying guest. It would make more sense to expand this simple scheme rather than for local government to employ more mindless minions to mismanage yet another impractical initiative.

THIS COLITION HAS BIG PROBLEMS this colition is causing problems for everyone

this latest gaff with this housing is going to make sure that labour return to power .they did a better job anyway .

Agree it's a crackpot scheme. My wife and I have worked hard to buy our large house. We didn't change our car nor go on holidays abroad. The idea that I would let it be rented to families who would wreck it and are on benefits that I already contribute to is ludicrous. It would be against my human rights to have to move and believe you me, I would use every penny I have to fight this. Liberals are hanging in there by their teeth and keep thinking of stupid things to keep them in the limelight. I'm looking forward to the next general election where they will be wiped off the face of the earth. They have alienated students, middle class and now pensioners with their crazy schemes. The only people who like them now are those on benefits.

Anonymous 1... Labour did a better job anyway!

Maggie pioneered 'right to buy' and much of today's housing woe is laid at that doorstep, but my mother was one of the many thousands of dyed-in-the-wool Labour voters who finally realised their aspirations (alien word for Labour!) to own a home, and the housing association scheme allowed her to move to buy, releasing her 4-bed house for a new social housing family.

Labour then had an unchallenged 15 years to build affordable housing... and did what? 18 months of the Coalition can't turn that around overnight.

Red Ed has enough problems trying to convince his own Party that he really is tough...

Vitually all of the objections raised by Citywire readers are valid reasons why the scheme will almost certainly never take off. Who wants local authority tenants wrecking a valuable property - what about tax and benefits - what's wrong with Rent-a-Room - why would an elderly person used to living in their family home want to move into sheltered accommodation unless forced to do so - why would this scheme be any less disruptive than selling and moving to a smaller property?The list goes on.

What is needed is more affordable housing built where it is needed - in London and the South East where there are still many brownfield sites owned by local authorities. In addition, public sector jobs should be moved to areas of high unemployment where properties are affordable. Whole government departments could be moved if there was a will to do so. Why is the Ministry of Defence in London when all its activities take place elsewhere in the UK or abroad? Very few public sector workers actually need to be in London.

If I were to rent out my house for £800 per month, income tax would be £160,nett income £640, possibly less if the increased income reduces the age allowance. There are costs involved in property letting,insurance etc. Rent modest flat in this area would would be £500-£600 per month. My house would cease to be my principal residence, what about capital gains tax when eventually sold? What would happen having moved into a flat, and my house in occupied by a homeless family and I need residential care. Would I be able to regain possesion at short notice so it could be sold. I certainly agree with the comment about handing over my property to the local council, I would NOT be happy with that! Do our politicians live in the same world as everyone else!!!

One of the details omitted is how much the councils will charge for the service and how many more seat polishers they will hire to mis'manage' the lettings and how much they will charge for sorting out their cock ups? Believe, they will want paying to do that.

More to the point, who is to decide what property is too large for the occupant, because in many instances they will have a vested interest in so finding because of what they can earn to 'mismanage' the lettings and management. many other details missing, tax on income, against which 'homes' charges cannot be offset.

Clegg should engage brain before he opens his mouth and puts in his size 15s........!

Lorna, I'm reading a lot of emotion, and you're fanning the flames admirably. Well done. Where does it say old people will be forced to do this? Where does it say they will be required to move to sheltered housing? Etc... As I say, you're good. I get the impression you can do this with your eyes closed and your mind switched off.

With unending heavy immigration we are going to need a great deal more by way of housing. There is no point in thnking that the flow will cease either. Our benefits system promises a standard of living that is far above anything that Romania or Somalia can offer. We've all got to pay for it one way or other and, in the end, I can imagine there will be heavy social pressure on so called bedroom blockers to downsize.

'Shapps is a bloody crook. If he wasn’t doing this, he’d be swindling grannies selling them conservatories… he’s a nasty little spiv.'

Whoever wrote that has my vote. Except I don't think he's very bright either. Where did Cameron get him from ? Put him back Dave. He's a no-hoper.

This scheme will probably work best with larger properties. There is a large house in London down at the end of The Mall with two rather elderly pensioners living in a house with a total of 240 bedrooms. Could they be helped to find somewhere smaller and cut down on the cost of all the support staff that they need?

How do our politicians dream up these schemes? Is it just that they live on another planet or are they deluded or demented even?

So lets look at this wonderful room for rent scheme.

In my area Single persons discount is £325 for the council tax, so that would be lost

Therefore a net figure of ££3925.00 is achievable.

Over 52 weeks that works out at ££75.50 pw

Divide that by 7 days = £10.78 per day

Divide by 24 hrs = £0.45 phr

Take into account the additional usage of household consumables and extra utility usage.

Also loss of privacy; choice of TV programme. etc, etc.

Technically if the lodger has a TV in their room you are supposed to have another tv licence!!!

Would you seriously accept effectively less than £10.78 per 24 hr period!!!!?

The room for rent rate should be doubled to £8500.00

That then might encourage the elderly to maybe take in 2 lodgers as it becomes worthwhile for them to do so.

I certainly agree with Paul Barrett - letting a room would be OK in larger 3/4 bedroom property, but in smaller/average house one would certainly lose privacy. I also agree with Lorna Burke, simply move to smaller property.

However when one considers huge rise in property values in past 20 years, increasing cost of living, collapsing banks,governments having debt problemsI.

I have often heard it said " I would rather have my money in property". Another factor capital gain on owner occupied house is TAX FREE whilst invest same amount in shares and you would be liable forcapital gains tax. What about our former Prime Minister, large town house in London and a country mansion in Bucks etc, and his party is supoosed to stand for fair shares and equality!!!

If you cannot have a water meter, Thames Water allow a single persons' discount on the already-hefty charge. Get a lodger in and you are charged a premium based on the number of bedrooms in the house.

Combine this with the loss of the single persons' council tax discount and there are suddenly hundreds of £ to be made up before the so-called 'unearned income' from the lodger even begins.

Then you get the lodgers who, for whatever reason, stay home all day, requiring full central heating, enjoying plenty of long hot baths.....

The current Rent a Room allowance is definitely not an incentive to lose one's privacy and risk a stranger in the house

Mrs B - Blocker...very good!! are you one of those rattling around in a property which the govt expects you to vacate and or take in lodgers for derisory amounts.

Fany you wanting to have the right to your own capital in the form of your property and not want to give it up to house a Romanian gypsy and 4 kids.

You know the one that has won access to benefits for selling the big issue on the basis that she was self employe4d!!!?

I hope all you city types start questioning the sellers of the big issue before you buy as you could be supporting an EU migrant to qualify for all the wonderful world of benefits.

I have 1 more bedroom than i need and i turned it into a study. Does that mean I should have given it to anyone the council can't house instead of putting my pc in it?

Johnny Anderson has summarized it. It is social meddling and nannying worthy of the last loony Labour government we told to get out (except the Scots of course). I know a number of Russians who lived in the Stalinist era. They tell me that many of the policies of this country are even more "Stalinist" than they experienced. And not a hint of irony when they say that.

As long as this country encourages immigration and as long as families are paid to produce more children than they can afford there will always be a need for more houses. Population increase increases the problems. This will end in tears if we don't change things and certainly more than moving some old people about.

Geoff has nicely summarized the main reasons why the housing market will NOT collapse by 30% as widely predicted last year by people on this Citywire blog. They are strangely silent now. Is that because they also predicted the price of gold at $3000 an oz.?

This country needs immigrants to compensate for some of the desperate skills shortage and inadequate education of the natives. Until that is put right they should shut up and learn to read and write and do percentages.

We do not need immigrants.

We need to offer a decent living wage, that will encourage unskilled British workers to take the sort of low grade work that the immigrants usually do.

The countries of Eastern Europe are a mess.

Their 'highly skilled and educated' workforce should stay at home.

Mass immigration is putting an insupportable burden, not only on our housing stock,but also our general infrastructure.

Raymond you need to do more homework.

If you need an electronics technician, a bio-physicist, a mathemetician, a physics teacher, a stem cell research scientist, or anyone to fill a whole range of much-needed "skilled" (especially scientific) jobs you (and UK employers) have to look at the East European immigrant skilled workforce. Otherwise the jobs will not be filled. Sad but true.

Unskilled British workers often prefer (and who can blame them) to live off benefits rather than work for low wages. It is not their fault that decades of loony socialist government has ruined a once envied educational system.

Historically, immigration strengthens a country, not weakens it. Most people with opinions like yours would get a shock if they traced their own family trees.

Raymond hurley is correct But that is another story.

Round here we have pensioners who would like to sell their house and move into flats or sheltered accomodation but cannot sell. I reckon subject to various details etc it might appeal to some people, remember, time is more urgent for older people. Anything that helps the housing industry and that includes building more council houses.

They could sell if they dropped the price.

The generation climbing aboard the huge pyramid scheme that is the UK housing market aren't able to pay as much as those entering in 2007. So the cohort exiting the scheme at the top are going to have to accept less for their houses.

This can be hard if one has become mentally atuned to a valuation given in 2007 but the world has changed.

What no-one has mentioned is that I require extra bedrooms on an occasional basis when my children and grandchildren come to visit. They do not live local to me, so when they visit for one or two weeks they have somewhere to stay.

"So the cohort exiting the scheme at the top are going to have to accept less for their houses".

Exiting? Where would they 'exit ' to?

Even for downsizing, there would have to be a substantial sum left over from the sale to cover stamp duty and expenses. In the case of moving into a flat or retirement complex, they would be faced with steep annual rises in service charges.

Then again, they may regret the move, but it will by then be too late......no wonder they stick where they are.

And as for the council, offering to rent out their house for a below market sum, no doubt squandering a fortune on bringing the property up to date for the politically correct tenant............

And as for the recent news that the pensioner should take in a free dosser - sorry lodger - in return for some household chores.........

Oh dear oh dear.....

"more than half the country's available bedrooms were empty in 2011."

Oh really?

Currently ,there are 3 empty bedrooms in my house.

They won't be empty if my children or grandchildren or both come to stay but the key Linton, is that it is my house:bought and paid for.

Consequently those 3 empty bedrooms are not amongst "the country's" available bedrooms,they are my available bedrooms.

Surely a simpler solution is to tax second homes and unoccupied houses back onto the market by doubling council tax on them annually.

A win win situation for the Exchequer but unlikely to appeal to all thoses two home owning MPs!!

If the public sector run it ther will be a diswaster, if the private sector run it there will be fat profits for the companies and little for the pensioners.

Another example of politicians thinking that they have do do something when doing nothing is a better option.

The problem can be finding a buyer which in some areas is not easy.

If owner occupied property was subject to capital gains tax as with other investments it would provide a level playing field. This is unlikely to happen as it could be a vote loser which is the prime concern of our members os Parliament.

Any one down sizing must have his head examined.

They will be paying tax on any rent they receive, losing benefits and be taking a huge gamble with the new neighbours and local hoodlums. Far better to stay where you are happy and rent a couple of which is tax free and you are the boss..

My wife and I are in out 88th year. We would love to move to be near our family who live.220 miles south of our current address. Due to the brilliant stewardship of G Browne, All Balls, Red ed, after saving for our retirement , and paying 40% tax on our savings, we find our savings are now paying 0.80% less 20% (Thanks Gordon.) Where do we get the cash to pay 4% on the cost of a house in Berkshire. Worked and saved until 79 years of age, to subsidise the banks

loaning to people who never saved, and now benefit from non existant bank rates. These politicians should be held to account. But no, they still pontificate on what we mugs should do to enable them to obtain salaries £62,00 pa, and pensions likewise, plus expenses in the £150,000 region.

Work hard, save hard, result be punished and financially abused by a bunch of people many of whom have never earned a penny through being employed to actually do anything useful . Profesional scroungers.

Anonymous 3 I sense your disgust, anger and despair with the largely unprincipled and incompetent mediocrities which have governed us over the last two decades and can offer no words in their defence.

If you have a 3 bed house rent out 2 of the bedrooms at £150.00 each all inclusive except food to lodgers(not tenants)

Use the rental income to rent where you want to be.

Nobody will know you have 2 lodgers.

You still live there as your room is still there for you.

The fact that you are hardly ever there is irrelevant.

This is still youir PPR.

The fact that you choose to rent somewhere is your perogative.

Nonone can tell you how many days you have to spend in your own PPR.

I didn't have to trample any families when I moved last year (at great expense). Indeed, the house was stuck on the market for quite awhile.

Vague euphemistic talk of housing needs, when what they want to do is strip our assets!

Well it's fun to see someone else - the elderly - being vilified for a change for the housing shortage

Makes a change from the endless landlord-bashing on here

I wonder who's next...

Immigrants? Single Mums?

LANDLORD X. Have you considered that there are probably very many elderly landlords ! Where do you think they put all that cash that they took out of the building societies and bank deposits ?

"The new housing benefit calculation represents one of the most radical acts of welfare reform in decades, says Linton Chiswick, and risks banishing entire communities to seaside ghettos".

Oh, so all those 'available bedrooms' in seaside would not be good enough for free social housing? Be careful what you wish for ..... rather than acquiring juicy lucrative homes in towns, councils could be faced with a glut of properties to fill in said seaside ghettos!