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Having, or creating, an extra space in your home for boomerang kids, a granny annex or to take advantage of £7500 per annum tax free from having a lodger adds real value. Viewber Co-Founder, Ed Mead's latest piece in Spectator Life:
The number of young people living at home rose from 2.4 million in 1999 to 3.5 million last year according to the ONS, who also say that 32 per cent of all males aged 20-34 are now living with their parents. Most of this increase has happened since the 08/09 financial crisis and we can expect more post Covid. The average age of a first-time buyer is now 34.
If you add to this the fact that care homes now seem a less palatable option for elderly relatives then the idea of having some extra space in the house to accommodate either grown children or ageing parents is suddenly a good idea.
Until recently any self-respecting married couple would consider accommodating one or other parent in later life but the term boomerang kids no longer applies to Mediterranean children tied to their mother’s apron strings. The middle-aged are now under more pressure to accommodate their grown-up children than they are their elderly parents.
The landscape for retirees is changing. Funky over 55’s urban housing and a ‘60 is the new 40’ mentality has seen the old norm of selling off your property in order to downsize and free up capital supplanted by a desire to continue earning and living independently.
What can you do to turn your granny annex into somewhere the kids will want to spend time rather than impinging on your life? Having them back home doesn’t mean you have to make it too easy for them. The annex or floor might now need better noise insulation, so think about flooring – no wood or laminate – and positioning of bathrooms. Whether you have a separate building or basement for them invite them to clean it themselves and check regularly – words alone won’t crack it. Cooking, dishes and laundry need to be done separately to maintain true independence so separate facilities are a must. From experience, asking for a contribution to living expenses can be a powerful incentive to avoid lapsing into comfort.
Most likely the space you were envisaging for the generation up might not be converted yet. But the good news is the generation down is hardier with lower expectations. Always try and put such space down rather than up – basements are better built, insulated and we all know the annoyance of someone walking about above us. They also often allow separate access and will cater to visitors better. If you can sort this equation out the interim period between younger ones leaving and older ones needing some space can be monetised by utilising your new-found landlord skills.
The value of properties that cater to these needs will be maintained or grow faster than those that don’t, allowing as they do the space to be rented out to a lodger to take advantage of £7,500 of tax-free income for renting out a room when it’s not being used by a family member. Bear in mind, however, that building a separate entrance with a permanent division from the main house may disqualify the annex from this tax-free allowance.
Whilst being precise about added value is difficult, prospective buyers will like the added flexibility and anything that puts your property at the front of the queue notionally adds value. A corollary of giving kids this space is that they’ll also be able to save for a deposit and get a foot on the housing ladder.