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Stephen Crowhurst’s late mother moved into a care home three years ago, leaving her McCarthy Stone retirement flat empty.
It has been on the market ever since. Despite cutting the price in half, to just £100,000 in a desperate attempt to offload the flat, it still hasn’t got a buyer.
Meanwhile, deferred service charges of £850 a month have continued to pile up, mounting to a £25,000 bill.
Crowhurst’s story highlights a developing crisis at the heart of Britain’s housing market – and one that will affect us all.
Retirement homes are marketed as the perfect solution to the growing problem of older homeowners living in properties that are unsuited to their needs.
But with the growing realisation that these flats can be a terrible investment, many retirees have little choice but to stay put. The result is a gridlocked housing ladder, with fewer large homes coming to market for growing young families, and millions of people left stuck where they are.
The lack of properties to downsize to is just one part of the crisis. Britain’s punishing tax system also shares the blame.
Average stamp duty bills have surged 194pc since 2015, from £1,557 to £4,572, according to estate agency Hamptons.
While successive governments have acknowledged the need to free up larger homes, reform remains elusive. Now financial institutions are trying to intervene. Barclays has called for “grants, vouchers or the ability to offset moving costs against stamp duty for individuals that choose to right-size”.
The case for action is mounting. More than half (57pc) of English households headed by someone aged 65 or older had two or more spare bedrooms in the 2021 census. However, the question remains: where are they supposed to go?
Targeted incentives
Countries worldwide offer grants and pension bonuses to encourage downsizing.
In Singapore, pensioners are offered a financial incentive to downsize through the Silver Housing Bonus, which supplements their retirement income when they move to a smaller property.
Elsewhere, governments have focused on making it easier for older people to remain in their communities while freeing up larger homes. Some US states, for example, offer grants for “accessory dwelling units” – granny annexes to you and me – while Australians aged 55 or older can put up to A$300,000 (£157,000) from a house sale into their retirement fund as a tax-friendly “downsizer contribution”.
But in Britain, when a pensioner moves out of the family home, the taxman comes knocking. That is despite the UK having one of the highest property tax burdens in the developed world, at 3.7pc of GDP, compared with 3.4pc in high-tax France, according to tax firm Ryan.
