14th November 2014
Politicians have called for a ‘Help to Move’ package, including scrapping stamp duty, that would support older people to downsize and potentially free up four million family homes.
The All Party Parliamentary Group (APPG) on housing and care for older people, which is chaired by Lord Best, said measures were needed to help older people who wished to, to downsize. The package would include an exemption from stamp duty for those buying a lower value home and an equity loan offer, that would mimic the Help to Buy scheme that is already in place to help people on to the property ladder.
The politicians argued the equity loan part of the package would help homeowners with lower value properties to ‘bridge the gap’ between the value of their home and the purchase of a retirement property. They said that access to mainstream mortgage lending was a problem for older people, even if they can afford the repayments.
It also states that an exemption from stamp duty on homes worth up to £250,000 would reduce transaction costs and be a net gain for the Treasury because of the consequent moves in the property market.
The APPG added that the pensions ‘guidance guarantee’ that will be introduced next year should include a package to deliver housing advice to help older people make a decision about where to live after retirement.
The report said 58% of over-60s, equal to eight million people living in seven million homes, are interested in moving. A third of over-60s said they specifically wanted to downsize and a quarter wanted to buy a retirement property.
This means 4.3 million family homes could potentially be freed up for younger families, easing pressure on the housing market.
However, between 40% and 50% of older homeowners are not able to afford to downsize in their local area as their family home is worth less than retirement housing, meaning financial support for older people wishing to move is even more crucial.
Reasons why retirement homes are so expensive are land prices, lack of supply and limited availability of ‘shared ownership’ options, said the APPG.
Best 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 later in life.
‘But downsizing is not easy. Our report recommends a Help to Move packaged 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.’