Kim Vernau, Chief Executive Officer of BLP Insurance, discusses the difficulties facing older people seeking suitable housing in later life
The housing crisis remains in full swing. A generation of people either approaching or in retirement are interested in downsizing but remain stuck due to a chronic shortage of suitable properties and lack of information. In light of the current state of the UK housing market, downsizing is an increasingly important option and merits far greater policy consideration from the government than is currently the case.
Generation Stuck
According to the recent Generation Stuck report into downsizing, over 55s account for over half of those properties in the UK classified as under-occupied. Additionally, over 3.5 million people within this age group are interested in downsizing, but the current market is failing to accommodate them. The inability for them to move has the result of a lack of family-sized homes on the market for the younger generation who really need them.
Heightened attention needs to be given to the housing needs of older people, with estimates that 60% of the projected growth in households over the next two decades will be among those aged 65 and over. We need to focus on the requirements that meet this generation’s day to day needs and which takes into account their aspirations.
Why downsize?
According to the Generation Stuck report, the main motivations of those people who are downsizing or considering downsizing include:
- Lower property maintenance;
- Reduced bills;
- Financial benefits in releasing equity, which can provide the financial resource to contribute to a pension or other family obligations;
- Health benefits, with properties better suited to individual physical needs and which have a positive impact on health and well-being;
- Social benefits where people can increase their social interactions in life, thereby addressing issues with loneliness in old age.
On the other side of the coin, the top reasons for not making any plans to downsize include the rationale that people could still manage the necessary housework, maintenance and bills and so did not see any real benefit in moving.
It could be argued that this belies a lack of forward thinking, as this may not be the case as people grow older. More information, guidance and advice need to be available so that people can make an informed decision about the benefits that downsizing may bring. Taking some time to consider future needs is preferable to waiting for an unforeseen event which could result in an enforced change to a person’s housing situation.
How can the government help?
In terms of government focus, various initiatives could be deployed. For example, an enhanced planning status for properties built with older people in mind. This would serve to ease the ease the path to planning approval, thereby removing a number of restraints and encouraging developers to consider this type of tenure and placing such homes within their larger developments. The development of more affordable housing would also assist in enabling those who do not hold a large amount of equity in their homes to move.
This could also be supported by either exempting such properties from Stamp Duty Land Tax (SDLT) or imposing a lesser tax burden when moving to a smaller home or specialist retirement housing. The social benefits of providing retirement homes should be recognised and incentivised as part of the government’s budget and the planning process. The increase in the number of transactions, as a result, should mean that the Treasury would not sustain a loss.
There are disadvantages and barriers which can arise when it comes to downsizing, which are more emotional than practical. This is compounded by the nuisance factor regarding having to rationalise the home’s belongings, packing and then moving. The term “downsizing” is unhelpful because of its negative connotations. The more appropriate description should be right-sizing.
Initiatives such as co-housing can also play their role for older people. In the best environments, it adds vital elements of social support and pastoral care while releasing larger properties to ease the housing shortage.
The key issues, however, remain. In the absence of affordable, suitable, and sufficient housing stock, “Generation Stuck” is less likely to take the decision to move. To enable us to address the current housing crisis, this is an opportunity which we simply can’t afford to ignore.
Kim Vernau
Chief Executive Officer
BLP Insurance
kim.vernau@blpinsurance.com
