If you are moving into residential care, own a property and find yourself having to fund the full cost of your long term care there are a few options available to you. You are strongly advised to consult an independent financial advisor to help you make an informed decision based on your own personal circumstances.
The move into residential care can be difficult, stressful and is very often at a time of crisis in a person’s life. Making yet more decisions about your house can seem overwhelming and you will need time to think about your options. From the date that your stay becomes permanent, there is a period of twelve weeks when you will be asked to pay towards the cost of your care but not expected to meet the full amount (please note this is subject to the value of your assets excluding your property being valued at £23,250 or less). This gives you some breathing space, to talk to relatives perhaps and to seek independent financial advice about how to pay for your care.
Whilst no-one will be forced to sell their home and it will be possible to leave it empty, there are other possibilities. The cost of leaving your house empty can be significant as the property and any gardens will need to be kept maintained and in a state of good repair to prevent deterioration and a reduction in value. The property will also need to be kept insured and this may require regular inspections. Empty homes which are not looked after can soon fall into a dilapidated state and cause problems for neighbours.
So it is worth considering your options carefully and these include:
Selling your property
If you decide to sell your property, the money from the sale can be invested in assets which pay out regular returns, for example, investment trusts or government bonds. These returns can help to fund the cost of your care. However, please note that returns from investments cannot be guaranteed and you may be liable to pay tax on income paid out from investments. You are strongly advised to speak to an independent financial advisor about this.
If you want to sell your property you will need to think about:
- Preparing the property for sale and disposing of any unwanted items
- Getting your property valued by a property surveyor or estate agent and setting an asking price
- Putting the property on the market, maybe with an estate agent or selling at auction
- Employing a solicitor or conveyancer to complete the legal documentation
Renting out your property
If you want to receive an income stream from your property asset, this may be an option to consider. You can make arrangements to rent out the property yourself or you can use an agency. Becoming a landlord will involve a number of responsibilities such as keeping the property insured and in a good state of repair.
A good letting agency should deal with many of these issues for you, helping to find a suitable tenant and ensuring that the property is maintained to acceptable standards. However there will be a charge for this which will reduce the amount of income that you are likely to receive.
Leaving your property empty
If you decide that you need more time to think about the options and your property will be left empty for some time or you have reached a decision not to sell or rent out your property, then you or your representative will need to make a number of arrangements including the following:
- Making sure the property is insured for being empty. Check the details of your cover carefully and note any changes
- Turning off the gas, water and all plugs so the property is kept safe
- Draining down the central heating system
- Securing accessible openings
- Removing rubbish and combustible materials
- Cancelling or redirect any deliveries, such as milk, newspapers or other mail
- Thinking about an alarm or something that would alert neighbours that the property was being broken into
- Arranging for someone to visit the property on a regular basis
- Ensuring that the garden is kept in as good an order as possible
- Arranging for property maintenance and repairs to be carried out as necessary
- Contacting the Council Tax department to notify them of your change in circumstance
The deferred payment scheme
If you decide to go ahead with any of the above options, the deferred payment scheme is available to you subject to certain conditions. If you decide to sell your property, this may take some time and the deferred payment scheme allows the council to help meet some of your care costs whilst your house in on the market. Please note for pension credit purposes, your benefit may not be affected for up to 26 weeks (or longer if reasonable) as long as steps are being taken to dispose of the property.
The scheme is also available if you want to rent out your property and generate some additional income to use to help pay for your care home fees. This means that the amount you owe the council will build up at a slower rate and the overall debt will be less when the property is finally sold. Anyone considering this should seek legal and financial advice. If you decide to rent out your property, the council will require that a formal assured shorthold tenancy agreement is in place for the period of the rental agreement. A copy of the tenancy agreement must be produced for the council on request.
Finally if you decide not to sell your house and it remains empty, subject to certain conditions, financial assistance with the payment of fees through the Scheme will be available, as long as you agree to keep the property insured, maintained and in a good state of repair.
The valuation
Before the council can agree to the deferred payment of your care home fees, it will need a valuation of your property. This will help us to determine the amount of money that your house may eventually be sold for and therefore how much debt the council will be able to recover.
The valuation of the property will be carried out by a surveyor appointed by the council who will undertake an inspection of your property and may require access to the interior. The cost of the valuation will be covered by the set-up fee that will be charged if you sign up to the agreement. You can request an independent assessment of the property’s value but this would be at your own expense. If an independent assessment estimates a substantially different value to that provided by the council, a figure must be agreed by both parties before the agreement can proceed.
As part of the deferred payment agreement, a council representative will carry out routine inspections of the property and access to the interior of your property may be required. This is to ensure that the property remains in a reasonable state of repair so that its value is retained. The cost of the inspection will be covered by your annual deferred payment administration charge.
Maintenance of your property
Maintenance of your house and gardens whilst you are in a care home is important. Regular maintenance work helps the property to maintain its value and stops it deteriorating and falling into a state of major disrepair. Properties which are left in a state of disrepair can cause problems for your neighbours, possibly attracting vandals and encouraging other types of anti-social behaviour.
As part of the deferred payment agreement the council will expect you or your representative to keep your property maintained to a reasonable standard. The property will need to be kept weatherproof and structurally sound. This will mean looking at the following areas:
- Roof and chimneys: missing or dislodged tiles/slates should be dealt with as soon as possible
- Gutters and downpipes: should not be blocked and cleared regularly. Rusty or cracked pipes should be attended to quickly to avoid major problems with dampness
- Walls: attending to cracks in the stonework, gaps between brickwork/stonework where pointing is missing, or water damage causing the surface of bricks or stonework to flake off
- Drains: should be kept free of debris, to ensure that water flows away freely without flooding the area
- Paths and boundaries: checking for uneven or broken surfaces and damaged sections of fencing
- Paintwork: checking for flaking paintwork which may mean that, for example, window frames are damaged or rotten
- Garden areas and hedges: should be kept tidy with hedges trimmed
The council’s Safe and Secure directory(see useful contacts at the end of this sheet)provides a useful list of trusted Blackpool traders providing a comprehensive range of services from building works to waste removal.
Emergency repairs
If the council’s property inspection identifies any areas which require repair, you or your representative will be notified and asked to arrange for the necessary work to be undertaken within a reasonable timescale. If the work is not carried out within the required timescale (usually a period of 8 weeks) the council retains the right to carry out the works in default if the condition of the property is considered to materially affect the original valuation. The cost of any work undertaken by the council can be paid for at the time or added to your deferred payment. Interest will be charged on any amounts which are added to the deferred payment.
Insurance
As soon as your property becomes vacant you or your representative will need to notify your insurer, as this constitutes a change in occupation and must be declared due to the increased risk. You are strongly advised to check any conditions which are specific to your policy and which may invalidate the policy if not complied with. To maintain cover on unoccupied properties, most insurance companies will have extra requirements and may demand increased premiums. Again if basic maintenance is carried out, such as clearing out drains and checking roofs, this will help to ensure properties are maintained to a level acceptable to insurers. If you have to make a claim your position is stronger if you can produce evidence of regular inspections. The longer a property remains vacant, the more it is exposed to risk, so it is essential to have security arrangements in place.
As part of the deferred payment agreement, the council will require that the property is comprehensively insured in the joint names of the policy holder and Blackpool Council or that the legal interest of Blackpool Council is noted in the policy. The sum insured must represent the full reinstatement value of the property (together with an amount for fees etc.). A copy of the full current insurance policy in force must be provided whenever reasonably requested together with evidence of renewal and up to date details of the amount and period of cover.
Useful contacts
Age UK
Provides information and advice on later life, from helping people find out the benefits they are entitled to claim, to discussing options that help make later life at home more manageable. There is also wide ranging information on finding a care home and paying for care.
Website: www.ageuk.org.uk
Association of Residential Letting Agents
Website: www.arla.co.uk
Telephone: 03300 553322
Blackpool Care and Repair
The Care and Repair team
Coastal House
17-19 Abingdon Street
Blackpool
FY1 1DG
Telephone: 01253 477900
Email: care&repair@bch.co.uk
Website: www.bch.co.uk/Customers/Care-and-Repair
Independent Age
A charity that provides free and impartial advice on home care, care homes, NHS services, housing and other issues advice for older people, their families and professionals on community care.
18 Avonmore Road
London
W14 8RR
Telephone: 0800 319 6789
Email: charity@independentage.org
Website: www.independentage.org
Pension Service (The)
For details of state pensions‚ including forecasts and how to claim your pension.
Telephone: 0800 731 0469
Textphone: 0800 731 0464
Website: www.gov.uk/browse/working/state-pension
Safe and Secure Directory
Includes details of trusted traders in Blackpool
Website: www.blackpool.gov.uk/Residents/Advice-and-support/Consumer-advice/Choosing-a-contractor.aspx
Society of Later Life Advisers (SOLLA)
The Society of Later Life Advisers is a not for profit organisation, set up to meet the need of consumers, advisers and those who provide financial products and services to the later life market.
PO Box 590
Sittingbourne
Kent
ME10 9EW
Telephone: 0333 202 0454
Website: www.societyoflaterlifeadvisers.co.uk
Email: admin@societyoflaterlifeadvisers.co.uk
To ensure services provided by the Council are accessible, information is available upon request in a variety of formats including large print, Braille, CD, memory stick or as an MP3 file. We can also provide help for British Sign Language users and provide information in languages other than English. Please ask for details or telephone 01253 477477.