Better support for the elderly could be an effective measure in combating the UK's housing shortage, according to the All Parliamentary Group on Housing and Care for Older People. Comprised of a mix of politicians and experts on UK housing and social issues, the organisation aims to highlight the link between elderly care and the UK property market, and to promote initiatives that can be of mutual benefit to both.
Free the elderly to free up homes
One such initiative is the proposed Help-to-Move equity loan. Whereas Help-to-Buy assists those looking to take their first step on the property ladder by subsidising their deposit on the property, Help-to-Move would instead focus on home owners at the other end of the scale – those looking to sell their home so they can downgrade.
An analysis by think-tank Demos supports the proposal. According to their data, over 58% of home owners over the age of 60 are interested in moving; a third wish to downsize in order to reduce their maintenance costs and release equity, while a quarter want to invest in a retirement property.
Unfortunately, over half of older home owners are unable to downgrade due to the prices of retirement housing, and many are unable to access mainstream mortgage lending despite being able to afford the repayments. Land prices, lack of supply and limited availability of 'shared ownership' options are also cited as factors that make it difficult for these home owners to acquire retirement housing.
A series of measures that would make retirement housing more affordable and assist the elderly in the moving process could potentially free up millions of family homes for first-time home buyers. Researchers estimate that about 4.3 million homes would be made available, doing much to alleviate the effects of the housing shortage.
The Help-to-Move package
Exempting older home owners from stamp duty on homes worth less than £250,000 is one measure being proposed that could be of significant benefit. Stamp duty is normally levied at one per cent for houses valued between £125,000 and £250,000, but a reduction for the elderly would actually bring about a net gain for the Treasury by boosting activity in the property market.
Lord Richard Best, chair of the APPG on Housing and Care for Older People, claims that a Help-to-Move package should not only focus on increasing the availability of affordable retirement housing, but should also include financial advice and guidance for elderly home owners looking to downgrade.
Considering the amount of housing that would be freed up in the process, it goes to show how better support for the elderly can indeed benefit society as a whole by providing the UK property market with a much-needed boost.