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Studies show more people in UK planning to downsize to fund retirement
Some 12% of the UK’s retired population are planning to downsize their property within the next five years, potentially unlocking an estimated £136.5 billion of housing equity in the process. This equates to 1.36 million people planning to move to help fund their retirement, according to the data from retirement income specialists MGM Advantage. The data also shows 18%, or 1.99 million retired people, have already downsized. By analysing house price data, calculating the amount of cash released through moving from a detached property to a bungalow, allowing for stamp duty and moving costs, MGM Advantage has worked out the UK average is £102,851. This figure represents an 18% increase in cash released compared to just a year ago when the average was £84,776, and is due to the relative increase in the value of a detached property compared to a bungalow. The data shows there are significant regional variations, with Greater London releasing the most cash at £295,593, while Wales didn’t fare anywhere near as well with a figure of £54,301 released after moving costs. ‘People often refer to their property as their pension, and these numbers show that many are considering downsizing to provide an income boost in retirement. However, the downsizing dream could turn into a retirement nightmare, as some areas of the country fare much better than others. This is simply a reflection of the housing market in the UK,’ said Andrew Tully of MGM Advantage. ‘Banking on your own home to provide an income in retirement does not come without risk. The old adage of all your eggs in one basket still holds true. Careful planning and consideration should be given before making the move, and with returns available from the cash released still very low, it is likely the capital will also be consumed over time,’ he pointed out. ‘If people want to stay in their homes to avoid the upheaval of moving, then solutions like equity release can provide an alternative route. A professional financial adviser will be able to help you navigate the retirement income maze and decide what is best for your personal circumstances,’ he added. Meanwhile, separate research from Baring Asset Management shows that 7% of non-retired people, the equivalent of around 2.5 million individuals, admit they are planning on selling their primary residence to fund their retirement. This is up 2% from last year. In total, 16% of people, nearly six million, say they are planning to rent or sell property to fund their retirement, up from 13% last year and the highest such figure since 2009. The survey found that the economic climate continues to have an impact on people looking to use property to fund some or all of their retirement: the number saying they now plan to sell or downsize a property to fund all of their retirement has risen to 4% from 2% in 2012. While the research found that a third (33%) of people that last year said they are planning on either… Continue reading
Lawyers warning over complexity of right to buy land proposals in Scotland
Plans to empower Scottish communities who want to register an interest in land in towns and cities could backfire due to the complexity of proposed changes to the law, it is claimed. According to the Law Society of Scotland, proposals to extend communities’ right to buy land to include people living in urban areas, could be thwarted by the complexity of the proposals and potentially limit rather than empower local groups and stall development plans for neglected land in urban areas. The Community Empowerment (Scotland) Bill introduced into the Scottish parliament amends the Land Reform (Scotland ) Act 2003 by allowing community bodies to register an interest in respect of not only rural land, but now also urban land in Scotland ‘While the committee welcomes the policy intention behind the bill, our concern is that there may be unintended consequences from the current proposals,’ said Alan McCreadie, secretary to the Society’s planning committee. ‘For example, what would happen if a community registered its interest in urban land which is already subject to a redevelopment proposal? While Scottish Ministers could, in those circumstances, decide that registration is not in the public interest, the uncertainty could have an adverse impact on investment decisions for developers,’ he explained. ‘The Land Reform (Scotland) Act 2003 has benefited people in Scotland’s rural communities and we would want to ensure the same kind of success in our towns and cities. The committee, however, highlights a marked difference between rural land and urban land which may well have a higher price and consequent development costs,’ he added. The Society also highlights that the procedure for registering community interest in abandoned or neglected land, which is undefined in the bill, is similar to Compulsory Purchase and there should therefore be a requirement for a viable business plan and robust development proposals in respect of any community right to buy abandoned or neglected land. ‘The very complexity of the proposals may also be an issue. Introducing an overly complex, bureaucratic process could discourage communities from working to improve their local area and it may be advisable to set up a central body to steer community bodies through the provisions of this bill,’ added McCreadie. Continue reading
Survey reveals extent of UK residential tenant fears over maintenance issues
One in five tenants in the UK has been evicted by their landlord or agent for complaining about problems, such as faulty boilers and leaking roofs, it is claimed. A survey conducted by online lettings agents PropertyLetByUs, also reveals that nearly a third of tenants are fearful of evictions if they complain about maintenance issues. The most common cause of complaints are faulty boilers at 28%, followed by leaking roofs at 22%, faulty showers and mould and condensation at 14%, leaking bathroom and window locks at 10%, broken windows at 8% and finally smoke alarms, pests and vermin at 6%. The research also shows that some tenants are waiting a long time to get problems fixed. Nearly 20% of tenants are having to wait one to two months, while 12% of tenants have experienced landlords that never fix the problem. Just a third report their landlord fixes problems quickly within a couple of days. ‘It is shocking that tenants are living in fear of being evicted and that many have to wait a considerable amount of time to get problems fixed. Landlords have a duty of care for their tenants and leaving problems, such as faulty boilers can be very dangerous and put lives at risk,’ said the firm’s managing director Jane Morris. She explained that there has been a lot of industry discussion on so called revenge evictions over the last few months. For example, there was a case earlier this year of a tenant who was ordered to leave his home in Ashford, Kent because the boiler in his £695 a month home kept failing. ‘It us a worrying trend. According to Shelter, in the past year alone, more than 200,000 people have faced eviction. It’s high time the government considered a system to encourage more good landlords into the market to increase the stock available and its quality,’ said Morris. ‘I welcome the calls made by the industry for extra tax breaks to improve private rental housing and fully support the call for effective regulation to tackle rogue landlords,’ she added. PropertyLetByUs has put together some guidelines on landlord response times for tenant complaints. It points out that landlords and agents have a duty of care to advise tenants on the correct course of action while contractors are organised, such as turning off gas taps, water stop cocks or main electricity supplies, to ensure that any problem does not cause danger to life and property. Any gas or major electrical fault is classed as urgent and should be attended to within 24 hours or less. This also applies when heating or hot water is affected, especially during cold weather. Water leaks should be dealt with within 24 hours, cookers within 48 hours and other broken appliances such as washing machines and dish washers should be attended to within 72 hours. ‘Communication is key and the landlord or agent should keep the tenant… Continue reading
