There needs to be a significant increase in the number of homes being purpose built for older people in the UK, according to a new report.
The housing market needs to have homes suitable for people to buy and rent and the report from the Policy Exchange also suggests that there should be a stamp duty incentive for older buyers.
It recommends that it should consider removing the stamp duty on the £125,000 to £250,000 price bracket for older home owners looking to downsize.
The analysis projects that demand from older people for rented homes will rise and this demand more thought and policy change.
It suggests that Government should aim for a significant increase in the number of new homes that are purpose built for older people each year. ‘To facilitate this, a legal and regulatory platform is needed which enables new models of retirement housing and a new tier of innovative providers to emerge,’ the report says.
The target should be for a sales and rental intermediate market to develop, that is, one that better serves baby boomers who are not wealthy enough to afford the more expensive end of the housing market and who are ineligible for social housing,’ it explain
It also says that local authorities have a part to play too, using local planning policies and new borrowing powers as announced in the 2018 Budget. They can improve the sheltered housing stock they already own, and support the development of new retirement housing in their area.
While, private providers, it adds, should spot the gap in the market and build retirement homes, for ownership and rent, but they should be ones that older people actually want to live in. ‘Retirement housing needs to be seen by baby boomers as a more desirable option, a challenge that is regularly being failed. Too often retirement housing is associated with care homes,’ it adds.
It also suggests that both national and local government should look to attract more institutional investment into the retirement housing sector and this should be directed towards private rental housing.
Local authorities should also consider exempting rental retirement schemes, where profit levels tend to be lower but where need is only going to increase, from needing to provide capital sums upfront as part of their planning obligations.
‘If more homes are built for the baby boomer generation, and people are provided greater choice in the housing market as they enter old age, many more ageing home owners will be attracted to downsize,’ the report says.
‘Ensuring that housing tailor made for older people is built to a high quality, and in designs and styles that are popular with older people, is essential to matching aspirations and encouraging a greater number of older people to move home when it is suited to their needs,’ it points out.
‘The aim should be bringing about a societal change in attitude towards downsizing and for it to be seen as a natural progression in someone’s life,’ it adds.
Stamp duty change would help, according to retirement providers McCarthy & Stone. ‘Moving costs, particularly stamp duty, are holding people back. Some 2.6 million people would be encouraged to move with a downsizing exemption, freeing up housing supply for families and first time buyers, and reducing the state’s social care burden,’ said Gary Day, group land and planning director.
‘There is also an urgent need to build more suitable housing that meets the different needs of those in retirement. Despite demand, only around 162,000 retirement properties have ever been built for older home owners, a woeful undersupply for the UK’s rapidly ageing population,’ he explained.
‘Planning policy is largely silent on the housing needs of older people. If the right policies and incentives were introduced, and the financial obligations and regulatory challenges faced by retirement developers addressed, supply could increase from around 6,000 units a year currently to 20,000 to 30,000 units a year,’ he added.
