Downsizing crucial to tackling skewed housing market

A new report has argued that the key to unlocking the UK’s housing crisis lies in tackling the under-occupation of family homes where there are more than 15 million ‘surplus’ bedrooms.

According to a new report from the Centre for the Study of Financial Innovation (CSFI), Too Little, Too Late? Housing for an ageing population, under-occupation is concentrated among the elderly population where people tend to live in couples or alone. The report shows that elderly people should be encouraged to downsize, but the lack of age-friendly housing in the UK limits the options for millions who are open to moving but decide to stay.

The analysis shows that if the situation does not improve, the overall bedroom surplus, where there is more than one bedroom per person, is projected to exceed 20 million in 2040, with nearly 13 million people above the age of 65 living in largely unsuitable households.

The shrinking size of households is linked to the ageing of the UK population, with growth in older households set to account for 36 per cent of the projected 3.7 million increase in the number of UK households by 2040.

The report recommends that: a new government strategy on housing calling for a joined-up approach between departments dealing with housing and health for older people should be established as a key part of the housing mix; in line with the national strategy, local authorities should be required to have a plan for retirement housing, including identifying appropriate sites; the NHS should acknowledge benefits of retirement communities to the elderly; and the government should promote benefits of downsizing and incentivise people to do so before social care is needed, instead of sending mixed messaging about selling homes to pay for social care.

The report reveals several barriers to downsizing, including a dearth of suitable alternatives. Only 2.5 per cent of the UK’s 29 million dwellings are defined as retirement housing, and the stock is heavily skewed towards houses with three or more bedrooms.

Les Mayhew, Professor of Statistics at Cass Business School, said: “If more family homes were freed up by downsizing, the benefits would cascade down the housing ladder because it would enable families to ‘upsize’, allowing more first-time buyers on to the bottom rung. More efficient use of the existing stock would reduce pressure to ‘just build more’ as a solution to the UK’s housing shortage.

“The demand is out there as baby boomers seek to redeploy housing equity into smaller, more convenient homes with independent living and easy access to services. This would also reduce pressure on local authority spending through transfer to care homes and allow more efficient delivery of social care to individuals.”

David Renard, LGA housing spokesman, said: “As we look to restart the housing market and build the homes the country needs, it is vital we make sure that we meet the housing needs of older people. Councils want to continue working with developers to offer suitably designed and affordable specialist housing, however as part of the recovery, councils will need to be given greater planning powers and resources to hold developers to account, ensuring they build the right homes in the right places with the required infrastructure needed by different groups within local communities.

“But it is crucial to acknowledge that the majority of older people will live in existing housing. The government needs to continue to invest in supporting the adaptation of homes to meet the needs of people as their circumstances change, keep older people safe and independent in their homes and prevent avoidable admissions to hospital and care homes.

“To get building again, councils also need to be able to keep 100 per cent of Right to Buy receipts, set discounts locally and increase the proportion of receipts that can be used to meet the cost of replacement homes. The government should also allow councils at least five years to spend Right to Buy receipts to avoid the coronavirus crisis exacerbating the current shortage of social housing.”