The London Mayor’s housing focus has been largely based around starter homes for the younger generation and affordable housing;
admirable intent and doubtless vote winners. Solutions to the London and UK housing crisis require broader, more holistic strategies. At the opposite end of the age demographic, many of our older population occupy three, four and five bedroom houses that they don’t need or necessarily want. Life and children have moved on. Family sized houses that cost more to maintain, that are under-occupied are often a burden.
So why hasn’t ‘downsizing’ caught on in the UK? It is an especially popular move in the USA, Australia, New Zealand, Holland and Denmark.One reason is that those countries are providing aspirational villages and homes that are part of their communities. The apartments, amenities, social integration, care and whole concept of later living are better considered, designed and managed. The product being built by many UK retirement developers is just not desirable; mostly, it is mean. Hence, we only downsize when a family or health crisis forces us to move from our family home. We stay too long in the home that we have become emotionally attached to. Our home is our castle until the siege of age or illness forces us into submission.
For many of the baby boomer generation, now hitting 70+ our castle has been a major source of our wealth. Increasing house prices over six decades has created unexpected equity even if our home is a 2-up-2-down terrace in a London suburb. Anything larger than that and it will be a substantial 6 or 7 figure equity asset. So why not cash in some of that equity, downsize and enjoy later life?
One obstacle is the appalling and misguided government tax strategy that massively increased stamp duty. It was intended as a stealthier way of raising tax without resorting to the unpopular alternative of a mansion tax. A vote winner to hit the rich. The outcome of the increase has been entirely negative. First and foremost, it has reduced the actual tax revenue from house sales. Not very clever for the Treasury! Critically, it has slowed down the rate of sales, created stagnation in the housing market and reduced fluidity. Fluidity is an important factor for the whole economy. It enables mobility in employment, reduces commuting congestion and a raft of other social and economic advantages. It has huge knock-on benefits for building and other supply chain elements of the economy. For retirees, Stamp Duty has created an additional obstacle to downsizing and hence, the freeing up of larger homes for growing families. When growing families ‘up-size’, it frees up smaller homes for younger families, couples and individuals. Could that just be more availability of starter homes? The housing market needs unblocking wherever possible to induce greater fluidity. The Government has tried various incentives at the starter end of the market; it would be a good idea to incentivise the elderly and retirement age group of our population to unblock a key sector of our housing stock. Planning policies are too inconsistent between authorities on the differentiation between C3 [ residential] and C2 use [ retirement with care]. This needs clarity and resolution to promote better projects.
Investment in more ‘Senior Living’ housing is now happening in the UK with major funds such as Legal & General and Axa becoming involved in the development of retirement villages. To date, many such schemes have simply not been good enough with minimal space, poor planning, inadequate communal amenities and poor social integration. The product has been neither aspirational nor inspirational enough to encourage ‘seniors’ to move for the latter years of life. Issues over leases and resales have brought bad press coverage about the sector which further discourages people from downsizing.
The best retirement schemes do provide a wide range of amenity spaces, including restaurants, cafes, lounges, libraries, activity & exercise rooms, gyms, game rooms, internet support, spas and even sky bars. Some of these villages are opening these facilities to the wider community to aid social integration, thereby avoiding ageist ghettos. One successful scheme is at the former Cadbury chocolate factory at Keynsham, near Bristol. This has a mixture of uses including housing, offices, restaurants, a nursery and primary school along-side retirement apartments operated by St Monica Trust. The integration and vibrant atmosphere makes it a great place to live.
The best senior living villages also provide appropriate levels of care, with the aim of enabling independent living for as long as possible. The provision of centralised on-site care achieves better service, greater efficiencies and reduces the burden on our stretched local and national health services. Well designed and managed retirement developments promote long term independence, provide support, freedom and friendship. These all help combat the loneliness that afflicts many as we grow older.
The UK needs a more creative, aspirational and socially integrated vision to deliver desirable housing for our aging population. Achieving this could just help connect several pieces in the complex housing jigsaw. If the housing crisis is ever to be solved, then government will have to see the bigger picture that is only visible when the many pieces come together.