Last-time buyers: top tips for the over-50s buying their final home
Just because you have bought and sold properties before doesn't mean you can't make mistakes. And you need to get that all-important last home right.
The family home is cherished by many, and it's difficult to let go of. But sentimentality doesn't pay the bills and sometimes a large family home simply becomes unmanageable as the occupants get older.
There are many reasons that older homeowners decide to move house and there is certainly no typical last-time buyer. Some upgrade to their dream property because they have the money, want a bigger home, and why shouldn't they? Others move to be closer to family, especially when grandchildren come along.
Many downsize to release equity to help fund retirement, while others are motivated by the lower running costs of a smaller home. For older homeowners with mobility issues, bungalows become attractive as do small retirement flats in buildings with lifts.
It's each to their own, of course, but whatever your reason for a last-time buy, make sure you consider all of your options first. The tips below include some of the major things you should consider, but remember to take independent and professional advice if you want to be clear how your home could affect your inheritance, cost of care and eligibility for State benefits.
1. Don't overstretch yourself
But ill health doesn't always come with a warning, and it's a sad fact of life that serious illness is more common when you reach your sixties and beyond. You might be planning to work until you are 75 but your body may not agree. Equally you might get made redundant and there isn't exactly an abundance of jobs out there. Many older jobseekers reckon it's particularly hard for them to find work in the current climate.
Mortgage lenders will also restrict your ability to borrow into your old age, with most limiting mortgage terms to finish by your 75th birthday, and of course you have to prove that your income stacks up. But it's up to you to be cautious too, because if you get it wrong you may have to sell your dream home, and there are no guarantees that you will get the price you want for it.
2. Consider downsizing
Nevertheless, many last-time buyers do decide to downsize to a smaller property that will be more manageable when they are older. And it's certainly worth considering, because a property that is easier to get around is a home you can stay in for longer if you do become ill or have impaired mobility. If you intend this move to be your last, it makes sense to consider a property that will suit your final years, as well as the next few.
Smaller homes are also easier to clean and cheaper to heat – something that might become important when you are not working, and possibly spending more time in your property than you currently do.
3. Location, location, location
Because of this it's important to consider access to public transport when you think about the location of your last-time buy.
Equally, a property within a bustling community gives you access to other people, shops, libraries, doctors and other amenities. These things do become more important when you retire and also sadly, if you lose a partner. The notion of being isolated seems quite alien to those of us with busy lives, but the fact is that's exactly how many older people on their own feel.
4. Be practical
They might have benefits that could prove useful later in life though – like accessible shower baths, 24-hour security, lifts to all floors, and access to care. Plus you are less likely to find that your neighbours are party animals (though it's possible).
They can also be good value and are usually located close to transport links and amenities. Contrast this with a quaint country cottage that might look just perfect, until you try to manage the crooked stairs, low doorframes and two mile walk to the post office.
5. Get advice
Whatever your preference, it's crucial that you seek both financial, legal and tax advice. Not only are there issues surrounding Inheritance Tax, but increasingly people are beginning to think about the possible cost of long-term care and your property's value comes into play here, along with your other assets.
You need to be clear about how gifting money and property to your children works because if you get it wrong there could be unintended consequences that affect you and your children. A good legal and tax adviser will be able to explain your options, and a financial adviser will look at the best deals available if you are planning to buy your last home with a mortgage, or if you are considering releasing equity in the future.