The government should help ‘kick-start’ an expansion of new housing for older downsizers by enabling them to access a ‘Help to Move’ package, alongside reducing transaction costs through a stamp duty exemption, according to a group of MPs.
The affordability of retirement housing was tackled by an inquiry by the All Party Parliamentary Group on housing and care for older people, with their report suggesting the problem is very real for the ‘middle market’ of owner occupiers who will not move to socially rented accommodation, but whose limited equity may not be enough to purchase a retirement home outright.
Laying out the evidence, it found that some 8m people over 60, in 7m homes, are interested in ‘down-sizing’.
If half did so, 3.5m homes, of which two thirds are family homes with three or more bedrooms, would become available.
The report stated: “Government could help kick-start an expansion of new housing for older downsizers by enabling them to access a ‘Help to Move’ package, along similar lines to Help to Buy, but also including tax incentives and comprehensive financial advice.
“The transaction costs of moving could also be reduced through stamp duty exemption for older movers in low value properties: this would create a net gain to the Treasury thanks to the subsequent moves this would generate.”
The report argued that as more older people retire with an outstanding mortgage, the problem is only likely to increase.
Deferred payments, shared ownership and lifetime leases were all identified as effective tools to make purchasing retirement properties more viable.
The group of MPs suggested that improved financial advice, linked to care and pensions, could change attitudes, particularly around benefits eligibility in relation to shared ownership and the cost savings associated with a move.
This would help challenge the perceived poor value of service charges, communal space and adaptations; and more sophisticated ways of deferring the payment of service charges could be of significant help to some older people.