Over a quarter of working adults (18-34 yr olds) are still living at home due to unaffordable rising house prices. Michael Holmes, spokesperson for The London Homebuilding & Renovating and Home Improvement Show (26-28 September, Kensington Olympia, London) offers property advice for people who find themselves in that position:
What can parents do to create a multigenerational home?
Self-build in the Garden
Only an option for those who have a large garden, but many self-build projects are created on garden plots where a section of garden is sub-divided and planning permission granted for a new dwelling. Parents can gift the plot as a potentially exempt transfer (free of CGT, SDLT and potentially from IHT subject to the 7 year rule).
Anyone with an income could apply for a self-build mortgage, possibly on a joint or guarantor basis with their parents, and build their own home.
Create an Annexe with its own kitchen and bathroom:
Convert a detached garage or garden outbuilding
Build a new annexe in the garden (build as an office and convert to annexe later) – this could be a substantial building if the garden is large and may not even require planning permission
Convert the loft to form a self-contained living space
Convert the cellar/basement into a self-contained living space
Convert part of the house (sub divide) to create a self-contained living space
Extend the house to form an annexe e.g. add an extension to the side or back, add a new storey above or even a basement storey below.
Positives: Will not require planning permission as an annexe if occupied by a member or dependent of the main household (it would to form an independent dwelling). Provides privacy and independence for all parties. Can add value to the property if done well. With planning permission could be let out to generate an income (must be under an Assured Shorthold Tenancy and with Lenders Consent).
Negatives: Unlike a spare bedroom (rent a room scheme) it cannot officially be occupied by a third party without planning permission. It will attract a second council tax charge as a separate dwelling and cannot be re-listed without fully removing either the kitchen or bathroom.
Affordable Self-build Schemes/Community and Group Self-build Schemes
As part of the Government’s many initiatives to encourage people to build their own home, and to improve affordability for those in housing need, some local authorities are making land available on a build now pay later basis, on a shared ownership basis (where the land is held by a community land trust (CLT), or for part ownership part rent – with the option to buy a larger share in the future. Schemes in Devon and Cornwall have brought the cost of home ownership – and thereby a foothold on the property ladder – down to as low as £60,000. Often builds are undertaken as part of a community group working together, sharing costs, skills and knowledge.
There are community and affordable self-build schemes being set up across the country – for details visit www.self-buildportal.gov.uk
If there isn’t currently a scheme near you, you can work with others to try and set one up. Under the Right to Build initiative recently announced by the Government – of which more details are to be announced – everyone will have the right to register their interest in building their own home and the local authority will have a duty to ensure that suitable affordable plots are made available by granting planning consents and working with local registered providers such as Housing Associations.