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    Shared ownership schemes lure downsizers
    Older homeowners concerned about paying tax on their estates are opting to sell up and release money for retirement

    Labour’s decision to freeze the threshold at which inheritance tax is payable at £325,000 may encourage many elderly homeowners to vote Conservative in the general election on May 6. The Tory party has vowed to raise the threshold to £1 million for everyone.

    Already, many older homeowners concerned about the cost of passing on taxable assets to their children — and tired of maintaining a large house — choose to sell up and downsize, releasing some spare cash at the same time.

    But for many, the viable property options within a certain price bracket are few and far between. Who wants to sell their home, only to spend their precious last years living in a cramped one-bedroom flat that has no space even for a dining table?

    Enter a new kind of buyer: the shared-ownership downsizer. Shared ownership — where you buy a percentage of a property, and pay rent on the remainder, usually to a housing association — is beginning to attract an older demographic who want to retain a sense of homeownership, but at the same time free up some money to spend now. And because they have to pay for only a smaller share, they can afford to buy somewhere a bit more upmarket.

    One particular attraction of shared ownership for the elderly buyer, according to Anna Bolsin, of Knight Frank’s affordable housing arm, is that it is flexible in the long term.

    “Buyers can start off with a 25 per cent share, paid for in cash, and trade up to a bigger share later down the line. It allows them to move in and out of different tenures depending on their changing circumstances,” she said.

    For Ken Breakspear, and his wife Maria, who are in the process of buying a 25 per cent share of a two-bedroom flat in St Mary’s, part of a converted school in Wantage, Oxfordshire, finding somewhere with enough room to house all their old furniture was paramount.

    “We wanted somewhere more convenient and a bit more compact but we didn’t want to get rid of all our old things,” Breakspear says. “Our new flat has two storeys, so there’s plenty of room.”

    Breakspear, 63, who is due to retire in two years from his job as a recruitment and personnel manager at Greggs, the bakery, will, if his application is approved, pay £455 rent a month on the flat, which is valued at £275,000.

    He and his wife had to have an offer accepted on their old home — a three-bedroom house in Grove, three miles away — before they could qualify for shared ownership.

    They also had to prove that they had a household income not exceeding £60,000, but Ken says that the process was explained in full and was easy to understand, even though they knew nothing about it before.

    Although there are several retirement villages nearby, four of the six potential sales currently registered at St Mary’s (the buyers’ eligibility for shared ownership is still being confirmed), are older downsizers, indicating that the schemes could become increasingly popular among older buyers.

    Another housing association, Family Mosaic, says that it also is looking into the possibilities for shared ownership targeted at an older demographic on one of its new schemes.

    In Ealing, West London, the Notting Hill Housing Association already runs shared-ownership developments specifically for older buyers under its HOOP scheme (Home Ownership for Older People).

    You must be aged over 60 to apply here, and it differs from normal shared ownership in that you can never buy 100 per cent of the property concerned. (Prices start at £160,000. Go to; alternatively, telephone 020-8357 4444).

    First-time buyers may be less enthusiastic about demand increasing in one of the few areas that they can afford. Anna Bolsin says, however: “There is certainly a big need for first-time-buyer housing. But I think in most cases the elderly demographic is unlikely to compete. Regular shared-ownership housing is often on high floors and in urban areas that are less appealing to elderly buyers. The different demographics will probably still be interested in different properties.”

    Another potential downside to the schemes is, of course, that many homeowners, having spent years trying to get away from renting, may see the move as a step backwards.

    Breakspear says, however, that it didn’t feel that way at all. “We looked at local retirement homes and other flats but we would have had to spend a lot more for less space. This way round we can buy a bigger share next year if we want to, or we can go on holiday. We’d quite like to go on a cruise. Or maybe even to Las Vegas.”

    For details call 0844 4704645 or go to

    Fast facts

    Under shared-ownership schemes you can buy shares worth 25-75 per cent of the property’s value on your first purchase. You must have a household income of under £60,000. After one year you can sometimes increase your share to anything up to 100 per cent. Some schemes, however, cap ownership at 75 per cent. You pay rent on the remaining share, usually owned by a housing association. The larger your portion the lower the rent. When you move, the association keeps its percentage of the profits. You may also be obliged to sell to someone on its database.

    The Times 16.04.2010