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John Slaughter is the Director of External Affairs at the Home Builders Federation and Chair of the HBF’s Retirement Housebuilders Group

It is widely acknowledged that housebuilding will be vital to kickstarting growth and helping the country recover from the impact of coronavirus. But as we all adjust to the new normal, Minsters should resist taking a business-as-usual approach to building the homes we need. Instead, when he unveils his fiscal package next month, the Chancellor should put specialist retirement housing at the heart of the effort to get the housing market restarted.

The more you examine the evidence, the stronger the case gets for helping more older people access specialist retirement housing in the wake of Covid-19. During the pandemic, older residents in these developments have been much safer than in wider society. More specialist retirement properties would therefore help ensure that vulnerable people are better protected against future pandemics.

Crucially, increasing provision of specialist retirement housing would also stimulate transactions throughout the housing market. Analysis by a former Treasury economist suggests that encouraging more older people to downsize would free up housing for young families looking for a family-sized home with a garden. And, through the chain effect running through the housing market, every specialist retirement property sold results in another two to three further transactions in the chain.

More specialist retirement housing would also assist with attempts to fix the social care crisis once and for all. As people in these properties are less likely to be admitted to hospital and require further care than people in mainstream housing, this type of accommodation can generate fiscal savings to the NHS and social care services of approximately £3,500 per person per year.

Demand for these properties is estimated to be at 30,000 dwellings a year, up from around 8,000 currently. If we could build this number every year for the next 10 years, it would generate additional fiscal savings across the NHS and social services of £1.4bn per year within a decade. On top of this, it could support the levelling up agenda, creating local jobs and boosting high streets through the spending power of the ‘grey pound’.

The shortage of suitable housing for older people is contributing towards a bottleneck at the top of the housing market. Millions of older people want to downsize but struggle to find suitable accommodation. Other older people are put off from making the move due to a range of financial, sentimental, and practical concerns.

The Chancellor could begin to tackle this bottleneck by making buyers of retirement properties exempt from stamp duty in order to encourage downsizing. Such an approach would recognise the benefits that result further down the chain, helping older people, young families, and first-time buyers. Going further, the Government should set a national target of making 10 per cent of all new housing specifically for older people. With Government targets currently set at delivering 300,000 homes a year by the middle of the next decade, this would mean delivering the objective of 30,000 retirement properties per year.

There are other policy solutions available to exploit the full potential of specialist retirement housing and, with the number of older people in England growing significantly, the time to act is now. Across the UK, older households are becoming increasingly common. Looking over the available data, it is immediately evident that the fastest growing household demographic is amongst those over 80, closely followed by the 65-79 group. Meanwhile, the younger household demographic is growing slowest.

Despite this, we currently have a housing supply policy geared towards encouraging the building of first-time buyer homes. Given the issues that young people face around the high cost of housing, this focus is entirely understandable. But the expected dramatic increase in the number of older households, combined with the benefits outlined, above should give the Chancellor and all politicians pause for thought.

In a speech earlier his year, Chris Pincher, the Housing Minister, acknowledged that “we need more housing for older people”. Six weeks ago, the Government gave the housing market the green light to get moving again. When he delivers his fiscal package, the Chancellor should take the opportunity to shift gear in the direction that the Housing Minister has suggested.

 

 

39 comments for: John Slaughter: How housing for older people can support the recovery effort

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