A group of influential politicians has urged the Government to offer a package of financial support and advice to make it easier for older people to move home if they wish to downsize.
The ‘Help to Move’ scheme would include a stamp duty exemption for older people buying lower value homes, an equity loan offer – similar to the ‘Help to Buy’ approach already aimed at first time buyers – and comprehensive advice linked to new pensions freedoms.
The recommendations are the result of an inquiry by the All Party Parliamentary Group (APPG) on Housing and Care for Older People. The inquiry’s final report argues that a ‘Help to Move’ equity loan would help older homeowners with lower value properties ‘bridge the gap’ between the value of their home and the purchase price of a new retirement property – pointing out that many older people cannot easily access mainstream mortgage lending, even when they can afford the repayments.
The report goes on to argue that exempting older people purchasing homes worth up to £250,000 from stamp duty would reduce their transaction costs, while leading to a net gain for the Treasury because of the consequent moves in the property market.
It also points out that the ‘guidance guarantee’, to be brought in with new pensions freedoms next year, as well as a new duty on local authorities to provide care advice, should be wrapped into a comprehensive package together with housing advice – helping older people make decisions about where and how they live after retirement.
Freeing up over 4 million family homes
The report cites analysis by the think-tank Demos revealing over half (58%) of over-60s – equal to around 8 million people currently living in 7 million homes – are interested in moving.
A third of over-60s specifically wanted to downsize, while a quarter said they were interested in buying a retirement property.
If ‘Help to Move’ encouraged all those wanting to downsize to move home researchers calculate that 4.3 million family homes would be freed up, easing the pressure on the housing market.
However, between 40-50% of older homeowners aren’t able to afford to downsize in their local area as their family home is not worth as much as new retirement housing – making additional financial support crucial for many older people in lower value properties.
The survey highlights land prices, an overall lack of supply, and limited availability of ‘shared ownership’ options as reasons why retirement housing is unaffordable for many older people.
Lord Best, chair of the All Party Parliamentary Group on Housing and Care for Older People, said:
“More and more people in their ‘extended middle age’ are thinking about downsizing. This can mean much reduced fuel bills and maintenance costs, perhaps the release of some capital, and can prevent a forced move in later life. But down-sizing is not easy. Our report recommends a Help to Move package of Stamp Duty relief, financial advice and mortgage support – like the Help to Buy assistance for younger purchasers – to generate the demand that will get more high-quality homes built for this age group.”