While the Housing White Paper recognises the significance of delivering more homes for older people, the solutions it offers may be no more than a nod to a web of complex problems.
The Housing White Paper has promised ways to stimulate the market to deliver new homes for older people. First time buyers being a more politically palatable target, last time buyers are often over-looked. However, the White Paper acknowledged that there are barriers to people moving out of family homes they have lived in for years.
This concurs with a recent survey by Later Life Ambitions, which showed that almost 80% of respondents were not currently considering downsizing to a smaller property, with over a third of respondents (35%) highlighting a lack of smaller homes on the market as a barrier to downsizing.
“It is great to see the Government’s commitment to explore the issues faced by older people when moving house,” said Malcolm Booth of Later Life Ambitions. “Removing the cost barriers older people face when moving house and increasing the supply of smaller houses would enable more pensioners to downsize and free up homes for larger families.
“This is why we welcome the government’s proposal to strengthen national policy so that local planning authorities are expected to have clear policies for addressing the housing requirements of groups with particular needs, including older and disabled people.”
However, while the government has promised to remove barriers, it seems some will remain firmly in place. Later Life Ambitions is critical of the Government for not including measures to decrease Stamp Duty for later life buyers. In a recent survey conducted by the campaign group, over half (59%) of respondents said that the cost of moving house and the cost of stamp duty are major barriers that would prevent them from moving home.
“We were very disappointed not to see today’s Housing White Paper include a proposal to remove Stamp Duty for downsizers, which was widely talked about beforehand, and would create a real incentive to stimulate this end of the market,” said Spencer McCarthy, CEO of Churchill Retirement Living. “For all the talk and all the promises, the Government needs to take more action to help the 8 million over 60s who are interested in downsizing, or ‘rightsizing’.”
“It is important that older people do not face cost barriers to taking up the government’s measures on the new later life homes which will be built as a result of the government’s new planning policy,” added Booth. A first step towards this would be to introduce further changes to stimulate the property market and free up valuable family-sized homes.”
According to Alice Watson, Head of Marketing at Retirement Advantage Equity Release, the White Paper exposes the need for a much bigger conversation about the role of property in retirement. “Far from being simply a roof over our heads, tapping into property wealth to fund retirement, alongside pensions and other savings, is becoming the norm for growing numbers of people across the country,” Watson said.
“When you consider that the amount we hold in property wealth massively outstrips what we hold in pensions, this is hardly surprising,” she added. “For many people, the retirement we want will be out of reach financially if we do not consider how we use our property as a source of funding. Any measures which support the trend of downsizing from a bigger property to a smaller one could impact this.
“If the Government end up prioritising downsizing over other ways of using property, such as equity release, it may impact the ability of people to secure the best use of their property as a form of retirement income. This is especially true when you consider that retirees are often surprised at how little money is available once all the fees and taxes associated with moving house are factored in.”