Selling your home is one of the most common means of paying for a care home in the UK. But you may be able to delay selling your home, or avoid it altogether.
Knowing if you need to sell your property
The first step is to know the amount you can afford to contribute towards the cost of your care home. This is determined during a financial assessment by your local authority, and may take into account the value of your home.
Please note, the value of your home won’t be included if you need care within your own home, or need a short-term or temporary stay in a care home.
There are also options to investigate if you don’t wish to sell your property. These include:
Questions about funding care?
Care Sourcer’s friendly care experts are on hand to provide guidance on typical care costs, help you explore your funding and benefit options, or even negotiate care fees on your behalf. Call us on freephone:
- Property disregard scheme – is when the local authority pays for a care home for the first 12 weeks of a person’s residence. This means that the local authority will disregard the value of your property for the first 12 weeks of your care which gives you some time to consider whether you want or need to sell your home to pay for care home’s costs.
- Deferred payment agreement – A deferred payment agreement is a loan that can be requested from your local authority. The local authority will then pay your care home fees, and use your property as security against the loan.
It is important to know that giving away your home (by transferring the deeds to someone else) or other assets specifically in order to reduce the amount you need to pay towards care is known as ‘deprivation of assets’.
If the local authority carries out a financial assessment and determines that a deprivation of assets has occurred, they may decide to calculate your financial liabilities as if you still owned your asset. This can mean that you are liable to pay more for your care than you can afford.
Renting out your home to pay for care
If you face the prospect of selling your home to pay for accommodation, you could first explore renting out your home, even temporarily.
This can be particularly useful if market conditions mean that by selling today you might not get the property’s full value. The cost of the rental income may cover all of the care home costs and you can keep the property in your estate.
However renting is not without its downsides. There may be periods of ‘down time’ between tenants when the property isn’t providing you with any income and you will incur extra costs like letting agent fees, repair and redecorating.
A lifetime mortgage is when you take a loan secured on your home and is most commonly used towards care given within your own home. This doesn’t need to be paid back until you die, or go into long-term care, such as a care home.
To release equity from a property you own using a lifetime mortgage, you need to be over 55 and your property has to be worth over £70,000.
Releasing equity from your home using this method means you can access the money tied up in your property. This money can then be put towards the cost of care. With a lifetime mortgage, your home continues to belong to you and you have full responsibility for it.
Home reversion plan
Home reversion is when some or all of your property is sold to a home reversion provider, and you receive a lump sum of money, or a rent-free lifetime lease.
Releasing equity from your home means you can access the money tied up in your property. This money can then be put towards the cost of care.
To release equity from a property you own, you need to be over 55 and your property has to be worth over £70,000.
Questions about funding care?
Care Sourcer’s friendly care experts are on hand to provide guidance on typical care costs, help you explore your funding and benefit options, or even negotiate care fees on your behalf.
Call us on freephone: 0800 098 8299 (Mon-Fri, 9am-5pm)
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