A Communities and Local Government parliamentary committee has called for the creation of a national housing strategy for older people.
If enacted, the strategy could be a major boost for the retirement living sector.
In one of the first large-scale government reports into retirement housing – and how it can help address the housing shortage and the care crisis in the NHS – the report specifically recommends changes to national planning policy to increase supply.
And while it stopped short of calling for a stamp duty cut or endorsing downsizing, it did signal a major shift in thinking and is a big win for operators, which have been lobbying for concessions.
A retirement housing strategy could also unlock billions in investment into housing the UK’s aging baby boomers.
“This broad and complex subject calls for a national strategy that brings together and improves the policy on housing for older people,” says the committee report.
“The strategy should bring together and improve the aspects of policy affecting housing for older people and be closely linked with the social care green paper and the government’s future work on social care.”
The report’s key real estate recommendations:
■ enact a range of measures to help old people move home: accreditation for companies; better customer service; guidance from lenders when applying for mortgage; widened access to shared ownership and shared equity;
■ amend the NPPF to push provision of housing for older people; standard approach to assessing need should address elderly housing needs;
■ designate specialist housing as a sub-category of the C2 planning classification, or assign it a new use class;
■ councils should publish strategies explaining how to meet the housing needs of older people in their area and include target numbers and sites in their local plans.
The report recognised that the cost to the NHS of poor housing is £1.4bn a year and acknowledged the benefits that better-quality stock could bring.
Policy change to unlock investment?
The purpose-built retirement market remains small, despite the potential for growth.
Knight Frank research published this week pointed to its current underprovision, saying there are just 725,000 retirement homes of the 28m total UK homes. Of these, purpose-built private retirement housing units account for just 162,000, or 0.6% of stock, and current annual building totals stand at around 6,000 units.
The argument from operators is that retirement housing is more expensive to produce than regular housing, and thus needs concessions, mainly because of the amount of extra amenity and care space that schemes require.
Clive Fenton, chief executive officer at retirement home developer McCarthy & Stone, says the fact the report accepts that retirement housing is expensive and needs planning concessions is a major step forward for the sector.
“It effectively recognises that retirement housing is very specialist, costs a lot more to produce and cannot afford the same level of social and planning contributions as normal housing can,” he says.
However, the report did not agree with all the recommendations of the sector, and stopped short of endorsing cuts in stamp duty and other financial concessions that have been argued for.
The committee said it was “not convinced that this would enable many more people to move. Many older homeowners are likely to receive a capital gain when they move that will cover the cost of the stamp duty payable on their new home.”
It also took a stance on the type of housing being produced, pointing out that the supply shortfall is acute for the “middle” markets. This could be seen as a reference to the large number of high-end providers entering the market and the type of stock being offered.
As yet, there are few models targeting those selling an “averagely” priced home, buying a cheaper retirement flat better suited to their needs, and also realising considerable equity.
“We believe that, in the face of demand, there is a shortfall in supply of specialist homes in general and particularly for private ownership and rent and for the ‘middle market’,” said the committee.
Rightsizing/downsizing and last-time buyers
And while the committee advocated an increase in the supply of retirement housing, it was dismissive of rightsizing and downsizing research, which advocates the potential for freeing up more homes.
The committee says: “We heard frequent claims that older people moving home in later life could be part of the solution to tackling the housing shortage but saw little real evidence to support this. The government should commission independent research to investigate the impact of ‘rightsizing’ on the housing market.”
This runs contrary to previous reports from L&G and Demos, which have suggested downsizing could free up between 2.6m and 3.3m family homes respectively.
It cited the National Pensioners Convention as saying: “Suggestions in public debate that older people have deliberately thwarted the homeowning aspirations of their grandchildren are both dangerous and inaccurate.”
Despite this, the report is the first sign of joined-up national policy towards the sector.
“The key thing for us is the fact that there is a need for a national strategy on how to bring forward more older people’s housing, strategy that is joined up between central and local government,” says Fenton.
“It puts into a semi-government report for the first time that supply here could massively ramp up. This is a massive part of the government’s strategy overall to up housing supply and adds to the care debate to look after our aging population.”
The committee was chaired by Clive Betts, MP for Sheffield South East, and among its 11 members includes former housing minister Mark Prisk.
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