Property Dilemma – What & Where?

ianthy

Great question. We are in the process of downsizing from our family home. We are aged 57 and will retire at the end of 2020. Originally we dreamt of a large period house like a rectory in the country with a walled garden. A couple of dogs and on evenings a nice walk to the village pub.

Fast forward to reality ... we are downsizing from a large terraced house 5 beds, 3 baths into a small 3 bed terraced house with a patio garden also in North London. We need to be near to activities, we love going into Central London, we plan to spend 6 months a year out of the UK, so Heathrow and Stanstead are just 40 mins away and St Pancras Eurostar 30 mins. Lower running costs, maintenance, home security and availability of people to provide paid support were also considerations.

We are due to start work on the new house in the new year and will future proof it as much as possible. With a bit of luck we should be able to stay in the new house until the end of our days, if not the value will be more than enough to buy a granny flat.

DairyQueen

The Christmas break is a great time to spend a few hours window-shopping on rightmove and Mr DQ and I have spent a couple of interesting afternoons browsing. The good news is that we are like-minded. The bad news is that every property that catches our attention is maintenance-intensive and far from services and shops.

Our mind-set is still fixed on the dream house and we are finding it near-impossible to prioritise the kind of practical design that we don't yet need. The best we have managed is to favour properties which include a downstairs bathroom and a room that could be used as a bedroom, and to avoid listed buildings.

Another consideration has entered the picture. Our local district councils have adopted policies of meeting housing quotas by developing fields on the edge of any village/market town equipped with services and shops. The danger of losing a treasured edge-of-community field view to a housing estate is therefore high. The only way to avoid that danger is to forego proximity to services or buy a property minus a feature that is high on our wish-list.

We have accepted that we are not willing to compromise on the dream in order to accommodate future needs. The two are impossible to reconcile and I guess we will follow the same path as our parents and, in our dotage, we will be rooted in unsuitable housing from which we refuse to move.

We have accepted that I must stay reasonably close to elderly parents otherwise providing the support they need will become a logistical nightmare and that criteria has significantly narrowed the search area.. A 30-min drive from them is the absolute maximum.

We do now have a plan for next year. The 'other place' (flat in urban area and Mr DQ's week-day base) will go on the market around May and, hopefully, will sell by the end of the summer. We plan to purchase the new home and move-in coincident with that sale and with Mr DQ's retirement. The final step will be to sell the small cottage where I am based.

Fingers crossed that the sluggish property market picks-up next year.

Audaxer

DairyQueen, this thread is interesting and giving me food for thought as we are thinking of moving in few years. Just wondering whether to get your dream property, you can finance it totally from the sale of your existing properties, or will it meaning cashing in some of your investments and savings? I recall you saying you have accumulated enough for a higher retirement income than you had previously anticipated, so presumably it wouldn't be a problem to cash in some investments if necessary to get your perfect dream home?

cfw1994

Good luck DQ, quite the journey, eh!

One thought (depending on numbers - could you make the flat your permanent home (“primary residence”?) for 6 months....then avoid capital gains tax on that sale? Perhaps not worth the bother....

Another: could you get a decent “edge of village” plot to develop your own dream home? Might be worth asking those authorities?

Good luck with elderly parents. Elderly FIL died earlier this year, leaving elderly and frail MIL....taking lots of time up.
With her being 30 minutes away, we deployed some Blink cameras (with her happy consent - she feels safer!) outside and inside her house....really good devices, simples to set up.
They help us keep an eye on who visits (mostly morning and even carers, papergirl and midnight milkman!), but also tells us if she is upstairs or down (stair lift!). Her 3 children find it a big help (& yes, of course, they are visiting regularly too!).

Slinky

I have several thoughts about views.



Whilst nobody would really want an ugly view, I have never wanted to 'die for a view' to paraphrase that oft touted phrase on the property purchase programmes.


Views generally belong to somebody else and you have not much say in any changes they want to make.


You cannot live in a view, and even if it's very attractive, how long do you actually spend looking at it, particularly if you've lived there any length of time?


Views don't have to be of countryside to be interesting. By chance the view from the kitchen window of our new home (bought for its proximity to shops/services/leisure activities we pursue) is down our close, across a park where we see people walking, playing sport etc, then there are some tennis courts behind with a glimpse of the 2 trains an hour beyond. There's always something different to see, as well as the changing seasons. There is little chance of our view changing substantially as the park is a flood plain for the nearby river.


Our previous home had a view across neighbouring farmland. For 40 years various builders have tried to get permission to build on it. At some point they will, if not it's likely to be the Oxford/Cambridge expressway going through there. We moved because we didn't want to live with either option.

p00hsticks

cfw1994 wrote: »

One thought (depending on numbers - could you make the flat your permanent home (“primary residence”?) for 6 months....then avoid capital gains tax on that sale? Perhaps not worth the bother....

I've not read the whole thread so I don't know Dairy Queen's precise postition, but simply moving into a currently owned property for a short period of time doesn't automatically wipe out the CGT liability.

Essentially CGT is calculated on (selling price - buying price - buying and selling costs) x percentage of time for which the property was not your primary residence (with an extra 18 months allwance deducted, soon to drop to 9)

cfw1994

p00hsticks wrote: »

I've not read the whole thread so I don't know Dairy Queen's precise postition, but simply moving into a currently owned property for a short period of time doesn't automatically wipe out the CGT liability.

Essentially CGT is calculated on (selling price - buying price - buying and selling costs) x percentage of time for which the property was not your primary residence (with an extra 18 months allwance deducted, soon to drop to 9)

Ahh, thx: rules have indeed changed, but from April looks like living there 9 months could make it a primary residence...
Depends on the savings, I guess.....I suspect not massively relevant here.

DairyQueen

Audaxer wrote: »

DairyQueen, this thread is interesting and giving me food for thought as we are thinking of moving in few years. Just wondering whether to get your dream property, you can finance it totally from the sale of your existing properties, or will it meaning cashing in some of your investments and savings? I recall you saying you have accumulated enough for a higher retirement income than you had previously anticipated, so presumably it wouldn't be a problem to cash in some investments if necessary to get your perfect dream home?

We currently own two, modest properties and, until recently, the plan was to sell both and just reinvest the proceeds into a single, bigger property.

We went through a period in our 50s when our capital came under pressure as we were hit by several, unexpected cash calls and redundancy. This ate up much of our cash savings and we were panicking a bit as, at the time, I hadn't reviewed and understood our pensions.

However, in the last year we have recouped a chunk of the capital courtesy of winning two high court cases on which we have been awarded costs. In addition, Mr DQ crystallised two SIPPs in order to avoid breaching the LTA and took max TFC from both. Two years ago I transferred my DB at an enhanced CETV. Finally, the markets have performed better than we anticipated. By last year it had dawned that our pension provision would provide a higher income than we anticipated.

The outcome has been a replenishment of the cash savings. This, plus the relatively recent realisation of how much we could safely drawdown from the SIPPs, means we are able to increase the property budget by around 20% inc moving costs.

I would have saved myself lots of worry if I had researched the pensions (and found this site) much earlier.

DairyQueen

cfw1994 wrote: »

One thought (depending on numbers - could you make the flat your permanent home (“primary residence”?) for 6 months....then avoid capital gains tax on that sale? Perhaps not worth the bother....

Tbh the CGT thing has been hovering in my peripheral vision and I've marginalised it. I would welcome some info on how we are likely affected as our situation is unusual.

I own one property outright and it has been my primary residence since purchase 12 years ago. I bought it before OH and I married.

The flat is owned outright by OH and has been his primary residence since it was purchased 4 years after we married. This unusual arrangement results from Mr DQ's requirement to be in commutable distance to his clients and my need to provide support to elderly parents (disabled mum).

Our retirement home will be the first that we own jointly and the first that we will jointly share as a primary residence.

I can't move into the flat (too far from parents) and the cottage is so tiny that it just about accommodates us both when OH is here at the weekends.

cfw1994 wrote: »

Another: could you get a decent “edge of village” plot to develop your own dream home? .

It's something we considered but the logistics of selling two properties and then self-building gives me the heebie jeebies.

cfw1994 wrote: »

Good luck with elderly parents. Elderly FIL died earlier this year, leaving elderly and frail MIL....taking lots of time up.
With her being 30 minutes away, we deployed some Blink cameras (with her happy consent - she feels safer!) outside and inside her house....really good devices, simples to set up.
They help us keep an eye on who visits (mostly morning and even carers, papergirl and midnight milkman!), but also tells us if she is upstairs or down (stair lift!). Her 3 children find it a big help (& yes, of course, they are visiting regularly too!).

I sympathise. There is no preparation for the inevitability of supporting parents as they age.

It's something that sneaks up on you. One day your parents are your safety net and the next you are theirs. My mum has been disabled for decades and dad has cared for her brilliantly for most of that time. Then he became ill. She can't be left alone for more than an hour or two. I was totally unprepared for this sudden turn of events.

You play the cards you're dealt.

DairyQueen

p00hsticks wrote: »

I've not read the whole thread so I don't know Dairy Queen's precise postition, but simply moving into a currently owned property for a short period of time doesn't automatically wipe out the CGT liability.

Essentially CGT is calculated on (selling price - buying price - buying and selling costs) x percentage of time for which the property was not your primary residence (with an extra 18 months allwance deducted, soon to drop to 9)

Thanks for this. My earlier post provides info on our unusual situation. Both properties are primary residences. Mr DQ is only at the house I own at weekends and it has been my primary residence since before we married. I visit the flat he owns about twice a year. It has never been my primary residence but has been his since it was purchased 4 years ago. We have never shared the same primary residence. The properties are in different counties and 50 miles apart.

I haven't a clue whether we are liable for CGT on either property.