Call to make it easier for pensioners to downsize and free up homes for families

Building more retirement properties in the UK would free up more than three million homes, offering a lifeline to families desperate to move up the housing ladder, according to a new report.

Analysis by the think tank Demos reveals 58% of over 60s are interested in moving but feel restricted by a lack of suitable alternative housing or a fear of an unfamiliar environment.

Those interested in downsizing are currently sitting on £400 billion of housing wealth and the report says that helping them move would free up 3.29 million properties, including two million three bedroom homes more suited to families.

Demos polling also shows that 76% of those over 60s wanting to move and occupying three, four and five bedroom houses wish to downsize. The research also tops previous estimates of pensioner's housing wealth, finding over 60s own £1.28 trillion in housing equity in England alone.

The report says helping older people move would also reinvigorate the bottom of the housing ladder, where soaring rents and sale prices are preventing first and second time buyers from moving into bigger homes. The report goes on to argue that the government's recent focus on housing for older people is a welcome step in the right direction, but the focus on bungalows as a solution to the housing crisis, put forward by Communities Secretary Eric Pickles, is unsustainable and does not go far enough.

Demos finds that older people want to be centrally located near shops and transport. However, bungalows can't be built in town centres in the quantity needed to prevent the looming crisis of an ageing population.

‘Instead what is urgently required is more retirement housing, particularly to cater for the specific needs of Britain's fastest increasing demographic bubble of over 85s, who often need on hand care and are inadequately catered for by bungalows. Often misunderstood, retirement housing is defined as accommodation where older people have their own dwellings and front door, but share communal areas such as lounges and restaurants, with facilities and staff on hand to provide round the clock support,’ it says.

The research also found that 25% of over 60s expressed particular interest in buying a retirement property, a total of 3.5 million people, which dwarfs the 100,000 retirement properties available to purchase. Such homes currently only make up 2% of Britain's housing stock, preventing many from being able to fulfil their wishes.

The report also found a significant lack of information about the potential benefits of retirement housing, which stopped many from considering a move. Polling reveals the relatively unknown benefits, which include more than eight in 10 residents reported feeling happier in their new home.

Also 45% of residents reported having better contact with family and friends, a further 48% reporting no decrease in contact, half of residents said that their energy bills were lower, residents reported spending less time in hospital and nearly a third felt that their health had improved since moving.

The Demos report also challenges the government to take a ‘whole chain' approach to housing policy rather than simply considering first time buyers by bringing retirement housing in line with other affordable housing schemes. In practice this could see a reduction, or exemption, of stamp duty and council tax for downsizers or buyers of specialist retirement properties.

‘Unlike in health or social care, the costs associated with overcoming the challenges of housing our ageing society are relatively small. The money for new housing is there already, locked up in over a trillion pounds worth of assets held by older people across the country,’ said Demos deputy director Claudia Wood.

‘The majority of older people in three, four and five bedroom homes want to downsize. Overcoming planning barriers to supply to meet this demand would benefit the economy, younger families stuck on the housing ladder and older people themselves. It's a mystery why successive governments haven't  taken this on board already,’ she added.