The older homebuyer market is worth £820bn, has 5.3m underoccupied homes and 3.3m owners looking to downsize. Freeing up such homes could help address the housing crisis, while also giving older people health, financial and social benefits.
It’s a logical solution, but it’s not happening so far. New research by Legal & General and economics consultancy Cebr quantifies the older homeowners’ market and considers ways of resolving this conundrum.
Its report, Last time buyers, found the typical older homeowner living in a four bedroom detached home with, on average, 2.3 spare bedrooms. For a variety of reasons, almost half of homeowners aged 55 and over had no plans to downsize at all, while just over 30% had given it consideration. For those considering a move, their homebuying aspiration is likely to be a two-bedroom home close to family and friends, with ready access to healthcare and shops. But the report points out, “Such requirements may sound simple, but the truth is that there is a dearth of this type of housing in the UK”. It found that a quarter of those planning to downsize had not done so because they could not find a suitable home.
The report puts forward 10 steps to unlocking the older homeowner market:
- Political support for expanded provision of age-specific housing, to be reflected in housing, planning and health and social care policy
- An integrated policy approach
- Tenure diversity including freehold, shared equity and rental options, alongside part-exchange of current homes
- Greater supply in the middle market – current provision of retirement housing is predominantly by affordable housing providers and premium private sector operators
- More urban housing, to meet the need for connectivity and amenity
- Tax relief to incentivise right sizing across the market. This could include stamp duty relief on home purchases by those over a certain age, a larger new homes bonus for retirement homes, and a council tax holiday for the first three years of occupation for new retirement homes
- Consolidation of public sector subsidies/benefits, such as housing benefit and social care support
- Greater recognition of the benefits of retirement housing by planning authorities, and targets for delivery
- Removal of development levies for retirement housing, in recognition of the additional amenities they often have to provide
- Equity release.
Nigel Wilson, chief executive of Legal & General, said: “To unlock the potential of the last time buyers market, we need to build more of the right type of housing (two bedroom properties suitable for older people and near family, friends and facilities); the right tax regime to incentivise moving, with stamp duty a key focus; and better options to allow for equity release so if older people want to stay put by accessing their housing wealth they can. If we get those right, we can help older people in the UK move to properties which better fit their lifestyles and their needs, and, in doing so, free up larger properties suitable for growing families.”