Home is where you come to when you’ve nothing better to do.
MARGARET THATCHER (MAY 1991)
You’ve worked all your life, saved hard and bought your family home, raised your children there and had many happy years in the property. For most of us in our 50s and 60s, our home becomes increasingly precious. There are around 10 million over-65s in Britain and the Office for National Statistics says that will increase to more than 16 million by 2033. Retired homeowners currently have a total property wealth owned outright of more than £752 billion recent figures have shown.
When we reach retirement we have the opportunity to consider whether our current home is still the place we really want to be. A report by Ipsos MORI (published in 2012) for the RIBA entitled ‘The Way We Live Now – What People Need and Expect from their Homes’ suggests the following: that as we grow older, locality is highly important. Retired people prefer to live somewhere within a safe community. Transport links which are good quality and suit our needs are important too, and expectations of our ideal home are powerfully shaped by the homes in which we have lived previously. Some of us may love period features and large rooms, for others mod cons are what matters. Many people put emotional considerations, such as the ‘feel’ of a home, as a priority. Whatever your preference, life stage is a major contributing factor in what makes the perfect home, with people of retirement age prioritizing different layouts, features and qualities to those with young families.
But is now the right time to consider moving home? According to a recent poll by Barclays Bank and The Daily Telegraph, among the over-50s many of us are looking to do exactly that. Some 31 per cent of those surveyed said they plan to move, with 53 per cent planning to downsize. A further 14 per cent are planning to do so to release equity from their property and 13 per cent are planning to move closer to their children. Before making a decision, however, it is wise to weigh up your options. If you are on benefits and you downsize, the capital you release could mean that you are no longer eligible for those benefits. Investing the capital you release to produce either income or capital growth could have tax implications for you – so this all needs consideration. A smaller property could mean that, if house prices should start rising again, the capital appreciation you see may also be lower than if you had stayed where you were. Most important of all you should consider whether downsizing will be liberating for you. Think about not just your current, but also your future needs. There is no point in moving house if you will have to do so again in a few years time should, say, your health deteriorate. Making your decisions carefully, not rushing into anything, doing your homework and being honest with yourself should help you to avoid making a costly mistake.
Since moving house is said to be one of the most stressful things in life, and house prices unlikely to rise much over the next few years, many people may prefer to sit tight. Should this plan appeal to you, there may be ways of adapting your home to suit your needs once you’ve retired. Would it be sensible to turn a bedroom into an upstairs study, or convert a spare room into a separate workroom for hobbies? You could consider letting one or two rooms. As well as solving the problem of wasted space, it would also bring in some extra income.
Ways of increasing the size of your property
There are all kinds of ways to improve your property and maximize its potential. A loft conversion is popular as it can add an extra bedroom and possibly even a bathroom. Building an extra room as an extension is the next favourite, followed by adding a conservatory, a new kitchen, central heating, bathrooms and new windows. Any new work must comply with building regulations. Most important, under the Party Wall Act, where appropriate you must notify your neighbours. Adding an extension to the back of your property is the most practical option. Smaller extensions to the rear or side of a property can often be built without having to make a planning application, provided that the design complies with the rules for permitted development (see www.planningportal.gov.uk). It is wise always to check with your local authority first before committing to any work.
An ambitious scheme, of course, would be to become your own neighbour by purchasing the next-door property. Knocking through allows more space than an extension without incurring moving costs or leaving the neighbourhood. This option is neither cheap nor simple. Professional advice from an architect is essential, so that the finished conjoined house looks right. This also makes selling the property much easier in the future.
Alternatively, if you live in an apartment you might be able to buy the adjoining unit or the one above or below then knock through or install a staircase to achieve double living space. Any construction work being undertaken must, of course, adhere strictly to planning and building regulations and you must ensure the project is completed properly. With regard to any home extension or ‘knock-through’ option, provided you can remain living in the property while the building work is being carried out, the disruption is less dramatic. Owners living onsite often make for a smoother and swifter conclusion to the project.
Despite being pricier than a conventional extension, if there is no scope to go outwards or upwards, extending below ground level is proving increasingly popular. This is particularly so in higher-value areas such as central London. Planning permission is normally required but is not usually an obstacle, even within a conservation area, because the new space has no visual impact on the street-scape. Converting an existing cellar is less expensive and does not usually require planning permission (however, do check first with your local authority). For further information, see www.basements.org.uk.
Another popular way to increase space in your home is to build above a garage. A conversion of this kind is reasonably simple and increases the size of your home easily and quickly. Any scheme would be subject to appropriate planning permission being granted. This is needed because of the extra height and alteration to the roof line. Whether your garage is single size or double, attached or detached, this type of extension is one of the quickest ‘wins’ because you are working with what you’ve got and you are spared the necessity of digging new foundations. You could extend into the garage itself as well as building above, if it’s not being used to house the car. Rooms above a detached garage make an ideal guest suite, office, study, granny or nanny flat (or somewhere to carry on a noisy hobby). Should this idea appeal, search the internet for specialist companies dealing solely with garage conversions.
Some people say that moving to a new home is one of the most stressful things in life. If you do decide to move, it makes sense that the sooner you start looking for your new home the better. If you are thinking of moving out of the neighbourhood, there are other factors to be taken into account such as access to shops and social activities, proximity to friends and relatives, availability of public transport and even health and social support services. If you are elderly or infirm, living in the country can create massive challenges, particularly if you have a long-term illness. Lack of public transport is one of the main causes of rural deprivation, with the loss of village shops and post offices being another. Anyone considering a major lifestyle change, such as moving to a rural location in retirement, should take time and review all options before coming to a decision.
Top tips if contemplating downsizing:
The question of downsizing is something that affects many over-60s. If you are considering moving to a smaller property, you will have to face the painful challenge of deciding what to keep and what to discard. The best way to tackle this is rather than thinking ‘What should I leave behind?’ think ‘What do I actually need?’ Check with family members to see if there are any items they want, and let them take them now. Don’t keep anything you don’t use. Let it go to someone who could use it. For more information on how to downsize without pain, contact APDO UK (the Association of Professional Declutterers and Organisers, formed in 2004). Website: www.apdo-uk.co.uk.
If you decide a move is for you, even if you think you know an area well, check it out properly before coming to a final decision. If possible, take a self-catering let for a couple of months, preferably out of season when rents are low and the weather is bad. A good idea is to limit your daily spending to your likely retirement income rather than splurge as most of us do on holiday. Do your research and visit www.upmystreet.com or www.neighbourhoodstatistics.co.uk.
If you are thinking of moving abroad, you should take this decision only after careful consideration. The political climate of that country, being far away from friends, not having the same healthcare arrangements and having to learn a new language – to name a few. For more information on the financial implications of living overseas, see the section ‘Retiring abroad’, on page 68.
Counting the cost
Moving house can be an expensive exercise but, if you can afford to move, some good bargains can be had. It is estimated that the cost is between 5 and 10 per cent of the value of a new home, once you have totted up extras such as search fees, removal charges, insurance, stamp duty, VAT, legal fees and estate agents’ commission. To find out the latest information about SDLT (stamp duty) see HM Revenue & Customs website: www.hmrc.gov.uk.
When buying a new home, especially an older property, it is essential to have a full building (structural) survey done before committing yourself. This will cost in the region of £500 for a small terraced house but is worth every penny. In particular, it will provide you with a comeback in law should things go wrong. A valuation report, while cheaper, is more superficial and may fail to detect flaws that could give you trouble and expense in the future.
If you are buying a newly built house, most mortgagees will lend on new homes only if they have a National House Building Council (NHBC) warranty or its equivalent. This is a 10-year ‘Buildmark’ residential warranty and insurance scheme under which the builder is responsible for putting right defects during the first two years. It is designed to protect owners of newly built or newly converted residential housing if a problem does occur in a new home registered with NHBC. See website: www.nhbc.co.uk. Also helpful to home buyers, the Land Registry allows members of the public to seek information directly about the 20 million or so properties held on its register via the Land Registry website: www.landregistry.gov.uk.
If you are selling your home, you no longer require a Home Information Pack (HIP), but the requirement for the Energy Performance Certificate (EPC) has been retained, whether you are selling or renting out.
Energy Performance Certificates (EPCs)
An EPC rates the property’s energy use and suggests ways to make energy-saving improvements. The EPC rating is on an A–G scale (like the EU energy label used on fridges and other white goods); the higher the rating, the more energy efficient the home is. The average UK home has a ‘D’ rating, and the Energy Saving Trust suggests you think carefully before choosing any home with an ‘F’ or ‘G’ rating. Newer homes generally use less energy, so buyers or renters looking at a recently built home would expect to see an EPC rating of ‘B’ or above. EPCs are produced by accredited Domestic Energy Assessors and cost from £30 to £80, depending on the size of the property. Sellers are required to commission, but won’t need to have received, an EPC before marketing their property.
Information
For details about local Domestic Energy Assessors see EPC Register; website: www.epcregister.com.
For a free and impartial home energy check visit Energy Saving Trust; website: www.energysavingtrust.org.uk.
For advice on leasehold legislation and policy, see the Department for Communities and Local Government section of website: www.gov.uk.
Bridging loans
Bridging loans are one way of solving the problem of moving house should the chain break between sale and purchase. But it can be an expensive option. Some of the major institutional estate agents operate chain-breaking schemes and may offer to buy your property at a discount (some 10 or 12 per cent less than the market price). For further information see website: www.bridgingloans.co.uk.
Estate agents
Finding your dream house is never easy. The National Association of Estate Agents (NAEA) runs a service called Property Live, a network of estate agents working with like-minded professionals committed to making the moving experience straightforward by providing access to a professional, friendly property service. See website: www.propertylive.co.uk.
There is a Property Ombudsman scheme to provide an independent review service for buyers or sellers of UK residential property in the event of a complaint. As with most Ombudsman schemes, action can be taken only against firms that are actually members of the scheme. See The Property Ombudsman website: www.tpos.co.uk.
Living in leasehold
An ever increasing number of people move into a flat as a retirement home. If acquiring a leasehold flat, there are one or two things to bear in mind before you buy. The freeholder of the building may be an investment company, a private investor, or ideally the leaseholders themselves in the form of a management company. With the advent of ‘right to manage’ leaseholders do not need to own the freehold but will be able to manage the building as if they were the freeholder. While it is important that leaseholders are aware of their rights, it is fundamental they are aware of their responsibilities. Principally this will be to keep the inside of their flat in good order, to pay their share of the cost of maintaining and running the building, to behave in a neighbourly manner and not to do certain things as set out in the lease, such as sublet their flat without the freeholder’s prior consent.
As for rights, first and foremost, is the peaceful occupation of the flat, often referred to as ‘quiet enjoyment’. In addition, the leaseholder has the right to expect the freeholder to maintain the building and common parts for which the leaseholder will be required to pay a ‘service charge’. This is a payment made by a leaseholder to the freeholder or their managing agent to maintain, repair and insure the building as well as to provide other services, such as lifts, central heating or cleaners. These charges are liable to change from one year to the next, but must at all times be ‘reasonable’. Leaseholders have a right to challenge the service charge if they feel it is ‘unreasonable’ via the Leasehold Valuation Tribunal (LVT). It is important to find out what the current charges are and the likely charges for future years and what, if any, reserves are held to cover the cost of major works such as external decoration of the building. For further information, see:
Leasehold Advisory Service (LVT): www.lease-advice.org.
Association of Retirement Housing Managers (ARHM): www.arhm.org.
Retiring abroad
Do you dream of retiring to the sun? A number of people contemplating an adventurous retirement raise funds on their family home in the UK and purchase a small property abroad, becoming what is known as ‘residential tourists’. This means they travel to and from their other house without much luggage and spend several months at a time in their overseas home. Such a property abroad tends to fall into the category of ‘lock up and leave’ and it bridges the gap between selling up and moving completely from the country you’ve lived in for years. It allows a certain amount of thinking time before you make a decision on whether or not the foreign property will at some point become your ‘forever’ home.
Should you be considering retiring abroad, there are a number of additional costs, besides purchasing the property: legal expenses, notary fees, stamp duty, registration fees and local taxes, costs of a solicitor and surveyor and the cost of making a new will. Removal costs from the UK to the new country can be quite heavy too. So if you decide to retire overseas, be careful. Some ways of protecting yourself when buying property abroad include:
There are many websites offering advice and information on retiring abroad. Look at:
www.gov.uk – Britons preparing to move or retire abroad.
www.propertyinretirement.co.uk – section on retiring abroad.
www.buyassociation.co.uk – section on advice on retiring abroad and homes abroad.
www.retirementexpert.co.uk – popular locations when retiring abroad.
www.shelteroffshore.com – information on living abroad.
www.expatfocus.com – provides essential information and advice for a successful move abroad.
Removals
Professional help is essential for anyone contemplating a house move. A reputable firm of removers and shippers will remove many of the headaches. A full packing service can save much anxiety and a lot of your time. Costs vary depending on the type and size of furniture, the distance over which it is being moved and other factors, including insurance and seasonal troughs and peaks. It pays to shop around and get at least three quotes from different removal firms. Remember, the cheapest may not necessarily be the best. Find out exactly what you are paying for and whether the price includes packing and insurance. The British Association of Removers (BAR) promotes excellence in the removals industry; for approved firms all of whom work to a rigorous code of practice, see website: www.bar.co.uk.
Retirement housing and sheltered accommodation
The demand for property that caters for older buyers is high, while the range of options available for purchasers has never been greater. You can choose from specially developed villages that provide independence, but also help and assistance where needed through to town centre developments aimed at ‘empty nesters’, and developments that have varying levels of care attached to them. The terms ‘retirement housing’ and ‘sheltered accommodation’ cover a wide variety of housing but are designed to bridge the gap between the family home and residential care. There are many well-designed, high-quality private developments of ‘retirement homes’ now on the market, for sale or rent, at prices to suit most pockets. As a general rule, you have to be over 55 when you buy property of this kind. While you may not wish to move into this type of accommodation just now, if the idea interests you in the long term it is worth planning ahead, as there are often very long waiting lists. For full details see Chapter 15, Caring for elderly parents.
Other options
Caravan or mobile home
Many retired people consider living in a caravan or mobile home. You may already own one as a holiday home that you are thinking of turning into more permanent accommodation. If you want to live in a caravan on land you own or other private land, you should contact your local authority for information about any planning permission or site licensing requirements that may apply. If you want to keep it on an established site, there is a varied choice. Check carefully, whichever you choose, that the site owner has all the necessary permissions. All disputes, since 30 April 2011, under the Mobile Homes Act 1983 are being dealt with by Residential Property Tribunals in place of the County Court.
Park mobile homes are modern, bungalow-style residential properties, usually sited on private estates. Impartial advice can be obtained from the NCC, the trade body that represents the UK park home (residential, caravan or mobile home) industry (www.thencc.org.uk). Before entering into a commitment to purchase a park home, it’s well worth visiting an exhibition dedicated to park homes to gain useful information. The main national exhibitions are: The National Park and Holiday Homes Show, The Park and Holiday Homes Show and The World of Park and Leisure Homes.
Park Home & Holiday Caravan magazine is the UK’s biggest and best-selling park home magazine and is full of information for those interested in park homes. See website: www.parkhomemagazine.co.uk.
For companies that specialize in new homes for sale on residential parks, ready for immediate occupation, see www.parkhome-living.co.uk.
Self-build
More than 25,000 people a year now build their own homes. With typical cost savings estimated at between 25 and 40 per cent, it’s very popular with the over-50s and many have successfully become self-builders. No prior building experience is necessary, although this of course helps. Obtaining planning permission from local councils is essential but can often be a protracted business. Individuals who wish to build on their own can make arrangements with an architect or company that sells standard plans and building kits. Be sure to do your research and seek professional advice first. Here are some useful websites for you to search:
www.homebuilding.co.uk: Information on all aspects of self-build including a self-build cost calculator.
www.buildstore.co.uk: Self-build, renovation, plots of land for sale, buying building materials.
www.builditthisway.co.uk: Self-build – the ultimate DIY project.
www.selfbuildland.co.uk: Self-build land for sale in the UK.
www.cat.org.uk: The Centre for Alternative Technology advice service on sustainable living and environmentally responsible building.
Becoming eco-friendly is something everyone should consider: making your home as energy saving, economical and convenient as possible is going to save money. The sooner you start, the earlier you will reap the benefit.
Even though the cost of solar panels is falling, the returns from installing them are nowhere near as good as they were a few years ago. But as energy costs rise, a solar panel on your roof may still be worth the investment. Do you research on the Energy Saving Trust website: www.energysavingtrust.org.uk.
Insulation
One of the best ways of reducing those increasing utility bills is proper insulation. Heat escapes from a building in four main ways: through the roof, walls, floor and loose-fitting doors and windows. Insulation not only can cut the heat loss dramatically but will usually more than pay for itself within four or five years.
Loft insulation
As much as 25 per cent of heat in a house escapes through the loft. The answer is to put a layer of insulating material, ideally 220 to 270 millimetres thick according to the material used, between and across the roof joists. To employ a specialist contractor, you can find one through the National Insulation Association website: www.nationalinsulationassociation.org.uk.
Doors and windows
A further 25 per cent of heat escapes through single-glazed windows. If you wish to install double glazing there are two main types: sealed units and secondary sashes (which can be removed in the summer). It reduces noise as well as saving heat. Since April 2002, any replacement doors and windows installed have to comply with strict thermal performance standards and the installer must be registered under the FENSA scheme; see the Glass and Glazing Federation website: www.ggf.co.uk.
Effective draught proofing saves heat loss as well as keeping out cold blasts of air. For draught proofing older sliding-sash windows and doors, wiper seals, fixed with rustproof pins and screws, need to be used. If you do fit draught seals, make sure you leave a space for a small amount of air to get through, or you may get problems with condensation. For advice on durable products and contractors, see the Draught Proofing Advisory Association website: www.dpaa-association.org.uk.
Heat loss can also be considerably reduced through hanging heavy curtains (both lined and interlined) over windows and doors. If your curtains cover the windowsill or rest on the floor you will keep warmer. It is better to have curtains too long than too short.
Wall insulation
More heat is lost through the walls than perhaps anywhere else in the house: it can be as much as 50 per cent. If your house was built after 1930, cavity wall insulation should be installed. Grants are available, and you could expect a typical saving of around 25 per cent off your heating bill each year. Make sure that the firm you use is registered with a reputable organization; if a foam fill is used, the application should comply with British Standard BS 5617 and the material with BS 5618.
Solid wall insulation can be considerably more expensive, but will provide savings of around 25 per cent off your annual heating bill. It involves applying an insulating material to the outside of the wall, plus rendering or cladding. Alternatively, an insulated thermal lining can be applied to the inside. For further information see:
British Board of Agrément, website: www.bbacerts.co.uk.
British Standards Institution, website: www.bsigroup.co.uk.
Cavity Insulation Guarantee Agency (CIGA), website: www.ciga.co.uk.
Eurisol UK Ltd, website: www.eurisol.com.
Insulated Render & Cladding Association Ltd, website: www.inca-ltd.org.uk.
National Insulation Association, website: www.nationalinsulationassociation.org.uk.
Floor insulation
Up to 15 per cent of heat loss can be saved through filling the cracks or gaps in the floorboards and skirting and then ensuring a good felt or rubber underlay is laid under the carpet. Be careful, however, that you do not block up the underfloor ventilation, which is necessary to protect floor timbers from dampness and rot. Solid concrete floors can be covered with cork tiles or carpet and felt or rubber underlay. See Energy Saving Trust website: www.energysavingtrust.org.uk.
If your hot water cylinder has no insulation, it could be costing you several pounds a week in wasted heat. A British Standard insulating jacket fitted around your hot water cylinder will cut wastage by three-quarters. Most hot water tanks now come ready supplied with insulation. If not, the jacket should be at least 75 millimetres thick. See Energy Saving Trust website: www.energysavingtrust.org.uk.
Grants
There are many schemes for helping pensioners with heating bills and insulation costs. The big six electricity companies give a £120 annual rebate to certain customers, especially anyone on a small pension. Those receiving the guaranteed credit element of Pension Credit automatically get the money. At their discretion, energy companies can also give the refund to other vulnerable customers, including people with a disability or long-term illness. For information contact the Energy Saving Trust: website www.energysavingtrust.org.uk.
Here are some other websites that give advice and information on this subject:
www.insulationgrants.info: Home insulation grants – government grants for insulation.
www.freeinsulation.co.uk: government-backed grants available for cavity wall and loft insulation.
www.getinsulation.co.uk: New cavity wall and loft insulation. Apply for 100 per cent grants.
www.homeheatingguide.co.uk: grants for home insulation.
www.government-grants.co.uk: Grants for loft and cavity wall insulation available.
Heating
It may be possible to save money by using different fuels or by heating parts of your house by means of different systems. Your local gas and electricity offices can advise on heating systems, running costs and energy conservation, as well as heating and hot water appliances.
The Solid Fuel Association website gives advice and information on all aspects of solid fuel heating, including appliances and installation; website: www.solidfuel.co.uk. The Building Centre website has a wide range of information on building products with consumer guidance; website: www.buildingcentre.co.uk.
Buying and installing heating equipment
When buying equipment, check that it has been approved by the appropriate standards approvals board.
For electrical equipment, the letters to look for are BEAB (British Electro-technical Approvals Board) or CCA (CENELEC Certification Agreement), which is the European Union equivalent.
For gas appliances, look for the CE mark, which denotes that appliances meet the requirements of the Gas Appliance (Safety) Regulations Act 1995. Domestic solid fuel appliances should be approved by the Solid Fuel Appliances Approval Scheme; check the sales literature.
Gas appliances should only be installed by a Gas Safe Register registered installer. Registration is compulsory by law. As a further safeguard, all registered gas installers carry a Gas Safe Register ID card. After a gas appliance has been installed, you should receive a safety certificate from the Gas Safe Register, which must be kept as you may need it should you want to sell your home in the future. See the Gas Safe Register website: www.gassaferegister.co.uk.
When looking for contractors, it is now a legal requirement for electricians as well as kitchen, bathroom and gas installers to comply with Part P of the Building Regulations. You would therefore be well advised to check that any contractor you propose using is enrolled with the relevant inspection council or is a member of the relevant trade association.
Electricians should be approved by the NICEIC and covered for technical work by the NICEIC Complaints Procedure and Guarantee of Standards Scheme and undertake to work to British Standard 7671. Any substandard work must be put right at no extra cost to the consumer. For local approved contractors see website: www.niceic.org.uk.
An alternative source for finding a reputable electrician is the Electrical Contractors’ Association. See website: www.eca.co.uk.
Tips for reducing your energy bills
Energy can be saved in lots of small ways. Taken together, they could amount to quite a large cut in your bills. Here are some suggestions from www.energychoices.co.uk:
If you have a disability, or are on a low income, you could qualify for the Social Tariff from your energy suppliers. You can ask also your gas or electricity supplier to put you on the Priority Service Register.
British Gas offers an Essentials Programme with a range of products, services and advice for vulnerable customers (such as those with low incomes and disabilities). See website: www.britishgas.co.uk.
The Energy Saving Trust has information on grants and money-saving ideas. See website: www.energysavingtrust.org.uk. Consumer Direct is the government-funded consumer advice service; Citizens Advice can give you advice about your consumer rights, see www.adviceguide.org.uk/consumer. Two other useful websites are: www.moneysavingexpert.com and www.seniorsdiscounts.co.uk.
If your house needs structural repairs, a wise first step would be to contact the Royal Institution of Chartered Surveyors to help you find a reputable chartered surveyor. See website: www.rics.org.
Disabled facilities grant (DFG)
This helps towards the costs of adapting your home to enable you to live there, should you become disabled, obtainable from your local council. It can cover a wide range of improvements, including the provision of suitable bathroom or kitchen facilities. Provided the applicant is eligible, a mandatory grant of up to £30,000 may be available in England, £25,000 in Northern Ireland and up to £36,000 in Wales.
As with most other grants, there is a means test. The local authority will want to check that the proposed work is reasonable and practicable according to the age and condition of the property, and the local social services department will need to be satisfied that the work is necessary and appropriate to meet the individual’s needs. The grant can be applied for either by the disabled person or by a joint owner or joint tenant or landlord on his or her behalf. For further information, contact the environmental health or housing department of your local authority. See website: www.gov.uk – Disabled people.
Do not start work until approval has been given to your grant application, as you will not be eligible for a grant once work has started.
People on low incomes or the disabled may be eligible for help from the Social Fund: see website: www.gov.uk – Benefits.
Other help for disabled people
Your local authority may be able to help with the provision of certain special facilities such as a stair lift, telephone installations or a ramp to replace steps. Other useful contacts:
APHC Ltd (Association of Plumbing and Heating Contractors Ltd) holds a national register of licensed members. See website: www.aphc.co.uk.
Association of Building Engineers can supply names of qualified building engineers/surveyors. See website: www.abe.org.uk.
Association of Master Upholsterers & Soft Furnishers Ltd has a list of approved members; see website: www.upholsterers.co.uk.
The Building Centre can give guidance on building problems. See website: www.buildingcentre.co.uk.
Federation of Master Builders (FMB): lists of members are available from regional offices. See website: www.fmb.org.uk.
Guild of Master Craftsmen supplies names of all types of specialist craftspeople. See website: www.guildmc.com.
Institute of Plumbing and Heating Engineering lists professional plumbers. See website: www.ciphe.org.uk.
Royal Institute of British Architects (RIBA) has a free Clients Service that will recommend up to three suitable architects. See website: www.architecture.com.
The Scottish and Northern Ireland Plumbing Employers’ Federation (SNIPEF) is the national trade association for plumbing and domestic heating contractors in Scotland and Northern Ireland. See website: www.snipef.org.
Home improvement agencies (HIAs)
Home improvement agencies (sometimes known as ‘staying put’ or ‘care and repair’ agencies) work with older or disabled people to help them remain in their own homes by providing advice and assistance on repairs, improvements and adaptations. They also advise on the availability of funding and welfare benefits, obtain prices, recommend reliable builders and inspect the completed job.
The British Legion and Age UK offer a handyman service to carry out small household repairs, and keep a list of Home Improvement Agencies:
Age UK website: www.ageuk.org.uk.
British Legion website: www.britishlegion.org.uk.
Foundations is the national body for Home Improvement Agencies in England. See website: www.foundations.uk.com.
Elderly Accommodation Counsel provides information on Home Improvement Agencies. See website: www.housingcare.org.
Anchor Trust offers comprehensive home care for the elderly. See website: www.anchor.org.uk.
Accidents in the home account for 40 per cent of all fatal accidents, resulting in nearly 5,000 deaths a year. Seventy per cent of these victims are over retirement age, and nearly 80 per cent of deaths are caused by falls. A further 3 million people need medical treatment. Tragically, it is all too often the little things that we keep meaning to attend to but never quite get round to that prove fatal. Here are a few suggestions for you to make your home safer:
Here are some useful websites:
According to the Home Office, the elderly are not more at risk from crime than any other section of society. Should you feel nervous or vulnerable, the crime prevention officer at your local police station will advise you on how to improve your security arrangements. He or she will also tell you whether there is a Neighbourhood Watch scheme and how you join it. This is a free service that the police are happy to provide.
If you are going away the Royal Mail’s Keepsafe service will store your mail so as to avoid it piling up and alerting potential burglars to your absence. There is a charge for the service. See: www.royalmail.com.
If your home will be unoccupied for any length of time, it is sensible to ask the local police to put it on their unattended premises register. Finally, time switches (cost around £15) turn lights on and off when you are away and can be used to switch on the heating before your return.
If you want to know of a reputable locksmith, you should contact the Master Locksmiths Association; website: www.locksmiths.co.uk.
The BBC Crimewatch Roadshow (www.bbc.co.uk/crimewatchroadshow) offers the following tips to stay safe:
Further useful information is supplied by:
Burglar alarms and safes
More elaborate precautions such as a burglar alarm are among the best ways of protecting your home. Although alarms are expensive they could be worth every penny. In the event of a break-in, you can summon help or ask the police to do what they can if you are away.
Many insurance companies will recommend suitable contractors to install burglar alarm equipment. The National Security Inspectorate website lists approved contractors: 700 recognized firms and some 1,000 branches. They also investigate technical complaints. See website: www.nsi.org.uk.
If you keep valuables or money in the house, you should think about buying a concealed wall or floor safe. If you are going away, it is a good idea to inform your neighbours. It is advisable to give them a key so that they can turn off and reset the alarm should the need arise.
According to recent research, seven out of 10 householders are underinsured, some of them unknowingly but some intentionally to keep premiums lower. Reassessing your policy makes sense for two reasons: first, because the number of burglaries has risen, so the risks are greater. Second, you may be able to obtain better value than you are getting at present. A number of insurance companies now give discounts on house contents premiums if proper security precautions have been installed.
Some insurance companies approach the problem differently and arrange discounts for their policyholders with manufacturers of security devices. If you would welcome independent advice on choosing a policy, you could contact British Insurance Brokers Associations and the Institute of Insurance Brokers. See website: www.biba.org.uk.
Older people who live on their own can be particularly at risk. A number of personal alarms are now available that are highly effective and can generally give you peace of mind. A sensible precaution is to carry a ‘screamer alarm’, sometimes known as a ‘personal attack button’. A mobile telephone can also increase your sense of security. Older people feel particularly vulnerable to mugging so it is sensible to take precautions when out and about. Many councils run community alarm schemes for those who are housebound. For a small fee you get a panic button, usually on a pendant or wristband, so you can contact an emergency operator if you have a fall, are taken ill, or suspect a break-in. The operator phones a friend, relative or the emergency services. Age UK has been running its alarm scheme for 30 years but try your local council first.
If your buildings and contents insurance was originally arranged through your building society, it may cease when your mortgage is paid off. If you buy a house with cash – for instance when moving to a smaller home – it is advisable to get a qualified assessor to work out the rebuilding costs and insurance value of your new home. The cost of replacing the fabric of your house, were it to burn down, could possibly be significantly greater than the amount for which it is currently insured. Remember, you must insure for the full rebuilding cost: the market value may be inappropriate. Your policy should also provide money to meet architects’ or surveyors’ fees, as well as alternative accommodation for you and your family if your home were completely destroyed by fire.
If you are planning to move into accommodation that has been converted from one large house into several flats or maisonettes, check with the landlord or managing agent that the insurance on the structure of the total building is adequate. When buying a new property you are under no obligation to insure your home with the particular company suggested by your building society. With all insurance, policies vary and it pays to shop around.
Owners of properties in flood-prone areas in the UK could soon have difficulty getting insurance. Even if they manage to find a policy that will cover them for flood damage, the premiums might well be unaffordable or impose huge excesses. It is advisable to check whether you live in a high-risk area and, if so, take steps to protect your property. Information on flood-risk areas and how to get help in obtaining insurance can be found on the Environment Agency website: www.environment-agency.gov.uk.
Another important extra feature of home insurance is ‘public liability cover’. This is designed to meet claims against you as a home owner, tenant or landlord – for example if a visitor tripped and was injured in your home (contents insurance) or if a tile fell from your roof and damaged a neighbour’s car (buildings insurance) – and you are found liable for the damage or injury.
Buildings insurance
If you rent your home, it’s up to your landlord to arrange buildings insurance. If you own your own home, it’s up to you. Even if you no longer have a mortgage, make sure your home is insured. BCIS, the RICS’s Building Cost Information Service, provides cost information on all aspects of construction. It has an online calculator at www.rics.co.uk to estimate how much cover you need.
It is important to have the right level of cover. Once you stop work, you may need to review the value of your home contents. With older possessions, you should assess the replacement cost and make sure you have a ‘new for old’ or ‘replacement as new’ policy. You should not forget to cancel items on your contents policy that you no longer possess. You must also add new valuables that have been bought or received as presents. In particular, do check that you are adequately covered for any home improvements you may have added.
Where antiques and jewellery are concerned, values can rise and fall disproportionately to inflation and depend on current market trends. For a professional valuation, contact the British Antique Dealers’ Association (BADA), website: www.bada.org or LAPADA (Association of Art & Antiques Dealers), website: www.lapada.org. Photographs of particularly valuable items can help in the assessment of premiums and settlement of claims. Property marking, for example with an ultraviolet marker, is another useful ploy, as it will help the police trace your possessions should any be stolen.
The Association of British Insurers has information on various aspects of household insurance and loss prevention; see website: www.abi.org.uk.
The British Insurance Brokers’ Association can provide information on registered insurance brokers in your area; see website: www.biba.org.uk.
Some insurance companies offer home and contents policies for older people at substantially reduced rates. See the following websites:
An increasing number of insurance companies offer generous no-claims discounts. Another type of discount-linked policy that is becoming more popular is one that carries an excess. Savings on premiums can be quite appreciable, if you check what terms they offer.
If you automatically renew your policy every year with the same company, you may find that your premiums have increased each year. Financial institutions are keen on ‘loyalty marketing’ but loyalty should work both ways. Don’t stay with a provider out of loyalty. Nowadays disloyalty pays because the winners are those customers who constantly switch from one provider to another.
Raising money on your home – equity release
Many home owners find that when they reach later life they have wealth tied up in their home but fewer savings or less income than they would like. If you don’t want to move, or can’t move, another option is equity release.
Taking money out of your home through an equity release scheme is a monumental – and one-way – decision. Which? magazine has a lot of advice on equity release, see their website: www.which.co.uk.
An equity release plan allows you to use some of the capital you have tied up in your home while keeping the right to carry on living there for as long as you need. It is an agreement between a home owner (aged 55 or over) and a provider, which enables the home owner to receive cash from the money tied up in their home. The money is free of tax and enables home owners to benefit from the value of their home. Releasing equity from your home could reduce your entitlement to some state benefits. It could also make a difference to your tax position, and it will reduce the value of your estate when you die. The important thing with equity release is to make sure your family knows all about your plans.
There are two main types of plan: a lifetime mortgage is where you raise money by taking out a mortgage against your property. The loan is repaid when the home is eventually sold. With a home reversion plan you sell part, or all, of your home now in return for a cash sum. You have the right to stay in your home as a tenant, paying little or no rent. Equity release plans are designed to run until you die or move out, for example if you move permanently into a care home. You can have a plan just for yourself, or for you and your partner. In the latter case, the plan runs until you both no longer need the home.
How a lifetime mortgage works
Like an ordinary mortgage, a lifetime mortgage is a loan secured against your home, but a lifetime mortgage is normally repaid only when you no longer need to live there. When taking out a lifetime mortgage you usually choose between borrowing a single lump sum or using a flexible or drawdown facility to provide a series of regular or ad hoc payments.
Most lifetime mortgages are ‘roll-up loans’. This means you normally don’t make any monthly repayments. Instead, interest is added to the loan and repaid only when your home is eventually sold. Usually interest is charged at a fixed rate. This means you can predict with certainty how the amount you owe will grow. Be wary of taking out a variable-rate plan where you do not have this certainty. With a roll-up loan, the amount you owe can increase quickly, so there may be little or nothing left from the proceeds after the loan is repaid. Most roll-up lifetime mortgages have a ‘negative-equity guarantee’ that promises the maximum you owe will not exceed the value of your home when it is sold.
How a home reversion plan works
With a home reversion plan you sell some, or all, of your home to a company (or in some cases, an individual investor) for less than the market value. In return you get a lump sum (which could be paid as a single sum or in instalments), a monthly income or both. You get the proceeds of the sale now. You no longer own your home, or the part you sold, but you have the right to stay there until you die or move out.
When your home is eventually sold, the reversion company gets all of the proceeds if you sold the whole of your home to them. If you sold part of your home, the reversion company gets its share. When you take out a home reversion plan, you don’t get the full market value of your property on the part you sell. The difference between what you give up and what you get reflects the cost to the reversion company of waiting to gets its money back while letting you live in the property for little or no rent. The size of the difference depends on your:
Tips for choosing the right equity release scheme:
How much equity release might cost
Remember, equity release plans are complex. You are strongly recommended to get advice from an independent financial adviser specializing in equity release and a solicitor who is familiar with this type of plan. You should get legal advice – and use your own solicitor (not one appointed by the equity release firm). You should also ensure that the property is independently valued by a qualified surveyor. The adviser may charge a fee, be paid by commission, or a combination of both.
For further information, see the Money Advice Service website: www.moneyadviceservice.org.uk. You should also check with the Equity Release Council. This is the industry body for the equity release sector and represents the providers, qualified financial advisers, lawyers, intermediaries and surveyors who work in the equity release sector. For further information see website: www.equityreleasecouncil.com. Alternatively, the Equity Release Information Centre publishes a free 32-page guide to equity release. Visit www.askeric.tv.
The following websites offer further information:
www.homereversionschemes.co.uk;
www.societyoflaterlifeadvisers.co.uk;
Some people whose home has become too large are tempted by the idea of taking in tenants. There are three broad choices: taking in paying guests or lodgers, letting part of your home as self-contained accommodation, or renting the whole house for a specified period of time. In all cases for your own protection it is essential to have a written agreement and to take up bank references, unless the let is a strictly temporary one where the money is paid in advance. Otherwise, rent should be collected quarterly and you should arrange a hefty deposit to cover any damage. An important point to be aware of is that there is now a set of strict rules concerning the treatment of deposits, with the risk of large fines for landlords and agents who fail to abide by them.
Lodgers: In a move to encourage more people to let out rooms in their home, the government allows you to earn up to £4,250 (£2,150 if letting jointly) a year free of tax. Any excess rental income you receive over £4,250 will be assessed for tax in the normal way. For further information, see HMRC website: www.hmrc.gov.uk and Gov.uk website: www.gov.uk. If you have a mortgage or are a tenant yourself (even with a very long lease), check with your building society or landlord that you are entitled to sublet.
This is the most informal arrangement, and will normally be either a casual holiday-type bed-and-breakfast let or a lodger who might be with you for a couple of years. In either case, the visitor will be sharing part of your home, the accommodation will be fully furnished, and you will be providing at least one full meal a day and possibly also basic cleaning services. You do not have to commit to having a lodger around the house full-time; some employees and lecturers need a room only between Monday and Friday. Foreign students are around all term time but not in the holidays. Foreign language students might need a room only for one six-week term. You can stipulate whether to take younger or older people.
There are few legal formalities involved in these types of lettings, and rent is entirely a matter for friendly agreement. As a resident owner you are also in a very strong position if you want your lodger to leave. Lodging arrangements can easily be ended, as your lodger has no legal rights to stay after the agreed period. A wise precaution is to check with your insurance company that your home contents policy will not be affected, since some insurers restrict cover to households with lodgers. Also, unless you make arrangements to the contrary, you should inform your lodger that his or her possessions are not covered by your policy.
If, as opposed to a lodger or the occasional summer paying guest, you offer regular B&B accommodation, you could be liable to pay business rates. Although this is not new, it appears that in recent years the Valuation Office Agency has been enforcing the regulation more strictly against people running B&B establishments.
Holiday lets
It is a good idea to register with your tourist information centre and to contact the environmental health office at your local council for any help and advice.
Letting rooms in your home
You could convert a basement or part of your house into a self-contained flat and let this either furnished or unfurnished. Alternatively, you could let a single room or rooms. As a general rule, provided you continue to live in the house your tenant(s) have little security of tenure and equally do not have the right to appeal against the rent. You would be advised to check your home contents policy with your insurance company. As a resident landlord, you have a guaranteed right to repossession of your property. If the letting is for a fixed term (eg six months or a year), the let will automatically cease at the end of that fixed period. If the arrangement is on a more ad hoc basis with no specified leaving date, it may be legally necessary to give at least four weeks’ notice in writing. The position over notices to quit will vary according to circumstances. Should you encounter any difficulties, it is possible that you may need to apply to the courts for an eviction order.
Tax note
If you subsequently sell your home, you may not be able to claim exemption from capital gains tax on the increase in value of a flat if it is entirely self-contained. It is therefore a good idea to retain some means of access to the main house or flat, but take legal advice as to what will qualify.
Renting out your home on a temporary basis
If you are thinking of spending the winter in the sun or are considering buying a retirement home that you will not occupy for a year or two, you need to understand the assured short-hold tenancy rules. Unless notified in advance that you need the property back sooner (there are very few grounds on which you can make this notification) or unless earlier possession is sought because of the tenant’s behaviour, your tenant has the right to stay for at least six months and must be given two months’ notice before you want the tenancy to end. It is strongly advisable to ask a solicitor or letting agent to help you draw up the agreement.
The safest solution if possible is to let your property to a company rather than to private individuals, since company tenants do not have the same security of tenure. However, it is important that the contract should make clear that your let is for residential, not business, purposes. Before entering into any agreement, you should seek professional advice.
And some other ideas…
If you think a little extra cash might be useful, depending on where you live, you could turn your garden into a ‘micro campsite’ and earn up to £40 per night: www.campinmygarden.com gives information. Or you could hire out your garden for a number of uses – vegetable plots, storage, or even wedding receptions: www.rentmygarden.co.uk.
Should you have extra space in your house and don’t mind renting out a room, by signing up to certain websites you can reach potential guests from all round the world. Try: www.gumtree.com; www.airbnb.co.uk; www.wimdu.co.uk; www.spareroom.co.uk; www.crashpadder.com; www.hosts-international.com.
If you’d rather not have people, you can make extra money out of the empty space in your house by renting out your cellar or loft as storage space to people who have too much stuff (www.storemates.co.uk). If parking is difficult or expensive in your area, drivers will pay to use your parking space or garage (www.yourparkingspace.co.uk; www.parkonmydrive.com).
You can offer your home for film and advertisement locations if you can cope with a lot of disruption. But it pays good money and film producers need other types of homes besides stately ones. Look at www.film-locations.co.uk or www.amazingspace.co.uk.
Buying a future retirement home in the country and renting it out as a holiday home in the summer months is another option worth considering. This can prove a useful and profitable investment. As long as certain conditions are met, income from furnished holiday lettings enjoys most of the benefits that there would be if it were taxed as trading income rather than as investment income. This means you can claim 10 per cent writing down capital allowances on such items as carpets, curtains and furniture as well as fixtures and fittings. Alternatively, you can claim an annual 10 per cent wear-and-tear allowance. The running expenses of a holiday home, including maintenance, advertising, insurance cover and council tax (or business rates – see below), are all largely allowable for tax, excluding that element that relates to your own occupation of the property. Married couples should consider whether the property is to be held in the husband’s or the wife’s name, or owned jointly. A solicitor or accountant will be able to advise you.
To qualify as furnished holiday accommodation, the property must be situated in the UK, be let on a commercial basis, be available for holiday letting for at least 140 days during the tax year and be actually let for at least 70 days. Moreover, for at least seven months a year, not necessarily continuous, the property must not normally be occupied by the same tenant for more than 31 consecutive days. There is always the danger that you might create an assured tenancy, so do take professional advice on drawing up the letting agreement. Similarly, if you decide to use one of the holiday rental agents to market your property, get a solicitor to check any contract you enter into with the company. For more information see the RICS (Royal Institution of Chartered Surveyors) website: www.rics.org.
A further point to note is that tax inspectors are taking a tougher line as to what is ‘commercial’. To safeguard yourself, it is important to draw up a broad business plan before you start and to make a real effort to satisfy the minimum letting requirements.
Tenants’ deposits
The Tenancy Deposit Scheme which came into force in April 2007 was created to ensure tenants get back the amount owing to them, to make any disputes about the deposit easier to resolve and to encourage tenants to look after the property during the agreed term of their let. Landlords or agents must now protect it under an approved scheme. Failure to do so within 14 days of receiving the money could result in the landlord being forced to pay the tenant three times the deposit amount.
The two types of tenancy deposit protection schemes available for landlords and letting agents are insurance-based schemes and custodial schemes. All schemes provide a free dispute resolution service. The schemes allow tenants to get all or part of their deposit back when they are entitled to it and encourage tenants and landlords to make a clear agreement from the start on the condition of the property. The schemes make any disputes easier to resolve. For further information see the following:
www.gov.uk – Tenancy Deposit Protection;
www.rla.org.uk – Residential Landlords Association;
www.thedisputeservice.co.uk – Dispute Service.
Finally, property that is rented ‘commercially’ (ie for 140 days or more a year) is normally liable for business rates, instead of the council tax you would otherwise pay. This could be more expensive, even though partially allowable against tax.
The Complete Guide to Letting Property by Liz Hodgkinson, published by Kogan Page, £10.99 (website: www.koganpage.com).
Housing Benefit
Provided you have no more than £16,000 in savings, you may be able to get help with your rent from your local council. You may qualify for Housing Benefit whether you are a council or private tenant or live in a hotel or hostel. For advice about your own particular circumstances, contact your local authority or your Citizens Advice Bureau.
The amount of benefit you get depends on five factors: the number of people in your household; your eligible rent (up to a prescribed maximum); your capital or savings; your income; and your ‘applicable amount’, which is the amount of money the government considers you need for basic living expenses. There have been cuts to housing benefit recently, sometimes dubbed ‘the bedroom tax’, so apply to your local authority to check if you are eligible for help.
If your income is less than your applicable amount you will receive maximum Housing Benefit towards your eligible rent (less any non-dependant deduction). You may be eligible for Income Support if your capital is less than £8,000, or less than £16,000 if you are aged 60 or over. If your income is equal to your applicable amount, you will also receive maximum Housing Benefit.
How to claim
If you think you are eligible for benefit you can apply online or ask your council for an application form. It should let you know within 14 days of receiving your completed application whether you are entitled to benefit, and will inform you of the amount. See website: www.gov.uk – Benefits.
Special accommodation
If you live in a mobile home or houseboat, you may be able to claim benefit for site fees or mooring charges. If you live in a private nursing or residential care home you will not normally be able to get Housing Benefit to help with the cost. However, you may be able to get help towards both the accommodation part of your fees and your living expenses through Income Support or possibly under the Community Care arrangements. If you make a claim for Income Support you can claim Housing Benefit and Council Tax Benefit at the same time.
Council tax
Council tax is based on the value of the dwelling in which you live (the property element) and also consists of a personal element – with discounts and exemptions applying to certain groups of people.
The property element
Most domestic properties are liable for council tax, including rented property, mobile homes and houseboats. The value of the property is assessed according to a banding system, with eight different bands (A to H). The banding of each property is determined by the government’s Valuation Office Agency. Small extensions or other improvements made after this date do not affect the valuation until the property changes hands. The planned council tax revaluation in England, due to take place in 2007, was postponed. Notification of the band is shown on the bill when it is sent out in April. If you think there has been a misunderstanding about the valuation (or your liability to pay the full amount) you may have the right of appeal.
Liability
Not everyone pays council tax. The bill is normally sent to the resident owner or joint owners of the property or, in the case of rented accommodation, to the tenant or joint tenants. Married couples and people with a shared legal interest in the property are jointly liable for the bill, unless they are students or severely mentally impaired. In some cases, for example in hostels or multi-occupied property, a non-resident landlord or owner will be liable but may pass on a share of the bill to the tenants or residents, which would probably be included as part of the rental charge.
The personal element
The valuation of each dwelling assumes that two adults will be resident. The charge does not increase if there are more adults. However if, as in many homes, there is a single adult, your council tax bill will be reduced by 25 per cent. Certain people are disregarded when determining the number of residents in a household: for full details see www.gov.uk – Council Tax.
Discounts and exemptions applying to property
Certain property is exempt from council tax, including:
Business-cum-domestic property
Business-cum-domestic property is rated according to usage, with the business section assessed for business rates and the domestic section for council tax.
Appeals
If you become the new person responsible for paying the council tax on a property that you feel has been wrongly banded, you have six months to appeal and can request that the valuation be reconsidered. Otherwise, there are only three other circumstances in which you can appeal:
If you have grounds for appeal, you should take up the matter with the Valuation Office. If the matter is not resolved, you can then appeal to an independent valuation tribunal. For advice and further information, contact your local Citizens Advice Bureau.
Council Tax Benefit
If you cannot afford your council tax because you have a low income, you may be able to obtain Council Tax Benefit. People on Pension Credit (Guarantee Credit) are entitled to rebates of up to 100 per cent. Even if you are not receiving any other social security benefit, you may still qualify for some Council Tax Benefit. The amount you get depends on your income, savings, personal circumstances, who else lives in your home (in particular whether they would be counted as ‘non-dependants’) and your net council tax bill (ie after any deductions that apply to your home). If you are not sure whether your income is low enough to entitle you to Council Tax Benefit, it is worth enquiring. If you disagree with your council’s decision, you can appeal. For further information see:
Citizens Advice Bureau, website: www.citizensadvice.org.uk.
Federation of Private Residents’ Associations Ltd (FPRA) website: www.fpra.org.uk.