SPECIAL FEATURE: Media clouds retirement living debate
Did you see the Daily Mail‘s front page three weeks ago on Friday? Or its follow-up story on the Sunday? If so, you could be forgiven for getting the impression that there is serious conflict over views of housing policy as it relates to older home-owners. But is there?
It comes down to how you frame the debate – as a further follow-up Mail article showed on 23 September. If we look beneath the issue of semantics, there is actually a great deal of consensus: we face an economic and housing conundrum that currently results in many older home-owners who would like to trade down feeling that the barriers to doing so make it impossible.
It’s not about coercion, but choice.
The coverage might lead you to think that the main debate is about a policy of coercion. It is not.
The real debate is about how to address the current lack of (perceived) choice for older home-owners who would like to move, but feel they can’t. No-one, as far as we know, is suggesting that older home-owners should be forced or guilt-tripped into doing anything they don’t want to.
But everyone is agreed that there are genuine policy challenges to face in that:
• there are too few homes of the right kind, in the right locations, at the right price that are designed to appeal to the “trading down” last-time buyer market, and
• the transaction costs involved in moving may act as a significant disincentive to trading down, even if it would otherwise be the preferred option of the household.
While we’re all for the freedom of the press, as well as the freedom of pensioners to choose their own housing solutions, we don’t want it inadvertently to score an own goal against the very people expressing concern as a result of the coverage.
It would be really unfortunate if the backlash – over 3,000 comments posted online under the original article – had the effect of pushing the real debate about the consensual issues of substance back into the bunker.
So let’s just remind ourselves quite how much consensus there really is.
If we look at the pre-election manifesto for Britain’s over-50s published by Saga (one of the organisations quoted), it is notable that one of the main actions on its wish list includes “stamp duty breaks to encourage people over 65 to right size – this could potentially release 111,000 properties into the market, helping to ease the current squeeze in property supply”. Saga research suggests that seven in 10 would like to “right size” after retirement, “but many do not feel the current housing stock is aimed at them”.
Similarly, Age UK’s Housing in later life report says that “We are not building enough of the right type of retirement housing to tempt older people who might wish to downsize”. It identifies that “older owners in poorer parts of the country have little or no equity available to exercise housing choice”, and suggests that more innovation could bring significant benefits: “Creating innovative models of housing with an integrated approach to services would make it easier to offer a wider range of housing choices while also boosting local housing markets, freeing up family housing and creating employment.”
So what should we do?
Legal & General is one high profile firm seeking to work strategically on the issues of housing supply for older people, and its report on last-time buyers identified a ten-point plan for addressing the conundrums identified above. It chimes strongly with our own manifesto that focused on “the old, the young and the in-betweeners”. For older households, we said that “the main issue is how to balance the competing considerations of income, the potential to release housing wealth, and care/housing need.”
We identified the need to:
• Address the regulatory stumbling blocks that relate to lending into retirement;
• Promote better pathways between the mainstream mortgage market, lifetime mortgages, and downsizing;
• Create opportunities for older households to downsize, promoting more efficient use of the housing stock; and
• Ensure new housing supply fully reflects the needs and aspirations of an ageing population.
Regular readers of News & Views will also have seen our chief economist’s opinion piece that articulates clearly why the way in which we use the existing housing stock can’t be seen in isolation, and how it fits – or needs to fit – into the overall context of a grown-up, coherent, dot-joined housing policy.
It’s clear that the challenges facing this market are both very real, and very emotive.
We’re steadily working towards outcomes from our lending into retirement project that will, we hope, partially contribute to the barriers to choice for older people and their housing.
Getting anywhere with this big issue is unlikely to come from any focus on division and conflict. It’s going to come from having a calm, rational debate about housing supply and use, and perhaps from some “nudge economics” to tip the balance of behaviour in ways that help to widen choice, not narrow it.