The Coalition Government is continuing with controversial plans to encourage older homeowners who may be struggling to maintain their home to move into smaller properties. The scheme is being proposed as an alternative option to equity release products.
The local authority would then let the former home to a family that needs more room and space. The council would take on the letting responsibility for maintaining the pensioner’s former home. The rent received from the property would be used to cover the costs of the owner renting a smaller home, with any possible surplus achieved added to their estate after death.
Some pensioners currently use the proceeds of equity release to help with the costs of heating and maintaining their existing home.
Housing Minister Grant Shapps said at the time that the local councils should be more active in offering assistance to those wanting to move into smaller properties or sheltered housing.
Grant Shapps said: ‘Older people, who should be enjoying their homes, have watched helplessly as their properties have become prisons.’
But there are fears that pensioners living in a 2-3 bedroom property may feel under pressure to give up what has been their family home throughout the decades.
Trade body SHIP said: ‘There are likely to be huge costs and high levels of administrative work attached to the scheme. And it begs the question of how many older people will choose to leave their family homes and move into a smaller property potentially away from family and friends.’
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