The Centre for the Study of Financial Innovation, a London-based think tank, has published a report that concludes that not enough is being done to service ‘last-time buyers’.
The research argues that the UK is currently facing a housing crisis as a result of an imbalance in supply and demand, and projects demand increasing to the tune of 200,000 more homes every year for the next quarter of a century.
It adds that as well as this, the right type of housing is not being developed – and that “too many” older people are living in unsuitable houses. This can only be fixed, the paper says, by shifting policy and commercial innovation focus away from first-time buyers and on to last-time buyers.
The report recommends the development of new policy and financial innovation that will help to align the housing stock with accommodation needs more closely, improve incentives to downsize, and free housing wealth.
In particular, the report suggests that shifting the focus of high streets from retail to residential use and improving regional planning to bring investment and infrastructure to declining towns; changing the rules to stamp duty tax in favour of last-time buyers; and earmarking housing equity for insurance to cover care costs, could alleviate some of the problems stored up for the future.
As well as this, it says that developing ideas to help with downsizing, such as chain-breaking part exchange schemes, where the builder of the house being moved into acquires the purchaser’s property as part of the deal, could pay dividends.
CASS Business School professor Les Mayhew, the author of the paper says: “The UK population is growing and rapidly ageing thanks to improvements in life expectancy.
“By taking a long view, the research clearly shows the origins of today’s housing crisis and what can be done to tackle it. A better alignment of the housing stock with housing needs, along with improved financial incentives, would significantly alleviate housing pressures to the benefit of all.”
Aldermore managing director Sue Hayes, whose company provided data, adds: “The report provides many practical and achievable recommendations on how the UK can expand the options for older homeowners and support their financial freedom.
“This will require changing mindsets and a collective refocus from government and the housing industry towards helping last-time buyers. The effect could have a substantial impact in tackling the wider housing crisis.”
More 2 life corporate marketing director Stuart Wilson adds: “Our own research revealed that more than half of retirees hadn’t been able to downsize due to a lack of suitably sized properties available on the market, with a further 35 per cent not downsizing due to the moving costs being too high.
Meanwhile, Audley Group chief executive Nick Sanderson comments: “The government must prioritise incentives and schemes to support the building of specialist retirement properties and encourage downsizing. The onus shouldn’t sit solely with the government however, the whole housing sector, including mortgage lenders and homebuilders, must be more innovative to support older homebuyers. If done correctly the entire country will reap the societal and economic benefits.”