Three’s company

Three’s company

Thousands of family homes now include grandparents – as rising house prices and the cost of care has driven more elderly people to live with their children.

House prices on the rise mean many of the younger generation are staying at home longer too, leading many homes to include three generations or more.

In many households, adults would merge funds with their parents in order to buy a larger house that neither could afford.

Suitable houses for the elderly are in short supply, as Britain’s elderly population increases, yet not enough small houses are being built to match their demand.

Adrian Anderson, Director of mortgage broker Anderson Harris, said: “It might not be everyone’s dream scenario but elderly parents in need of care, and rising household costs, mean we are increasingly seeing several generations of the same family living together.

“This can make a lot of sense as combining finances means there is more money available to buy a bigger home, while there are plenty of people around to care for elderly relatives and keep them company.”

Ben Pridden of Savills, the upmarket estate agent, said: “We have seen a number of cases where parents, or perhaps grandparents, and their grown-up children, have sold respective properties in order to buy together.

“Typically families making this move will look for property with ancillary accommodation, perhaps a farmhouse with a converted barn, providing self-contained living accommodation for the grandparents.”

Anna Campbell, now 57, was pregnant with her third child and looking for a house with her partner when they asked her mother, Sarah, to live with them in Portsmouth.

She said: “When we first spoke about it, we thought she wouldn’t be very keen, but she said it was probably sensible to move while she was still young and could make new friends.

“She owned her own home but couldn’t afford the nursing care she might have needed, and we also realised we could buy a significantly bigger house.”

But childcare costs can be reduced by always having an elderly relative on hand to look after the kids.

Anna said: “It was just good to have another adult in the house when you are raising three children,” said Ms Campbell.

“We always ate together as a family. My mother is someone we have to look after now, but that’s fine.”

Experts say families should consult a lawyer and get proper tax advice before making any firm commitments to multi-generational living in order to not fall foul of any inheritance legislation.

Mr Anderson said: “It is always worth seeking advice as to the best way of structuring any finance that may be required as it is a bit of a grey area.

“Putting an elderly grandparent on the mortgage is likely to deter lenders because many don’t like lending to anyone past retirement age, plus there could well be a problem trying to prove income if they are relying on a pension or savings to pay their share of the mortgage.”