Give housing incentives to older homeowners – not first-time buyers

Why doesn’t the government encourage companies to build not starter, but retirement homes, asks Mary Dejevsky

We have country set against town, those who own their own homes set against those who do not, and younger people set against older people (Getty)

The government is in trouble (again) over its plans to encourage more housebuilding. Its Levelling Up Bill sets targets for councils to build more houses and prescribes penalties if they don’t. Nearly 50 Conservative MPs oppose any target-setting, arguing that local councils and local people should have the final say.

We are back to the old argument about Nimbyism: the interests of those with nice houses in desirably leafy places are seen as pitted against the interests of those who cannot afford either to buy even a modest first home, or to move to a bigger place to accommodate their growing family. The former will fight tooth and nail to stop a charmless estate being built on the green fields next door. The latter need somewhere, preferably somewhere pleasant and convenient, to live.

The Conservative Party has an ideological foot in both camps and struggles to please both. It was spooked by the Liberal Democrat victory in the Chesham and Amersham by-election last summer, where Tory plans to ease planning rules nationally became a serious vote-loser in a hitherto safe seat. But not providing more homes is seen as helping to drive prices up and locking younger people out of the market. Doing nothing – or not very much – thus loses the party votes, too, not to mention, potentially, the bedrock of its future support.

And so we have country set against town, those who own their own homes set against those who do not, and younger people set against older people – the seeming unattainability of home ownership having become an ever more poison-tipped weapon in the continuing generation war.

What began as simple resentment against the “baby boomers” for having supposedly been able to buy absurdly cheap homes in their early 20s and accrue vast sums of unearned wealth as a result, has now become an insistent and envy-laden chorus about how older people should cease rattling around in their lavish mansions and make room for deserving families right now. Or, in the jargon, they are told to “downsize”.

As it happens, I don’t disagree with the general sentiment. It does not make sense for older people to occupy large houses, especially if – as is often the case with houses in this country – they are draughty, have a lot of stairs, and are expensive to maintain. But if that is to happen, then a lot of other things have to happen, too. I sometimes wonder how many of those advocates of downsizing – for “your own good”, of course – have ever actually tried to make that move, or helped someone else to do it.

Yes, there are elderly people reluctant to leave the long-standing family home for emotional reasons, or maybe they simply no longer have the energy to embark on all the work that any move entails. But the sad reality is that, even if they had thought about moving earlier, they would have been hard put to find anywhere to move to.

My late mother “downsized” twice. Once from a larger house to a cottage after my father died, then – after the doctor advised her that the stairs might be getting too much – to a ground-floor flat in a small block nearby. All efforts to find any form of sheltered housing in that large-ish Derbyshire village or any other village nearby were in vain; there was none.

Nor were there any small houses or flats built with the needs of older people in mind – such as no steps, a lift (not a “disabled” lift) beyond the ground floor, wider doors for those who might need a walker or a wheelchair. That is as true today as it was then, more than 20 years ago. Nor, it would seem, is there any building standard that requires all new or newly-adapted housing to be accessible, which would give older and less mobile people a far wider choice of places to live. Why not?

It is true, that around then one of the companies that builds retirement “villages” was in the process of negotiating for a site not 20 miles away (which is now complete). And there are (a few) more such “villages” and complexes now – though far fewer in proportion to the population than in many other countries.

But there are drawbacks here, too. One is financial. Any move costs money, and when even the most enthusiastic downsizers do the sums, they may find that they just don’t add up. The price of even a small retirement flat can match or exceed the likely proceeds from their house. In high-priced areas, there may be stamp duty to be paid, and any new retirement flat will carry a hefty service charge. Compare the space and the location, and would-be movers might decide that it makes better sense to stay where they are.

There are other difficulties. One, which will emerge only if they or their heirs try to sell, is that these places can be difficult to dispose of at almost any price. A would-be downsizer who is aware of this might feel they are selling their heirs short, or that it is just not a good deal.

Another is that retirement complexes tend to be sited on cheaper land, which may be less conveniently or scenically located. This may not suit someone who has been part of an established community and could make visiting and going out difficult. And one reason why there are fewer such complexes than there might be is that local authorities are not always amenable to giving planning permission, fearing the arrival of more people who need social care or other services that come off the council budget.

So even with the best will in the world, downsizing is not as simple a project as it might seem. Yet, it makes sense in the overall scheme of things not to have older people rattling around in big houses, especially if they would rather not be there. It also makes “upsizing” harder, which is why I wonder whether this government, like so many governments before it, is directing its housing help to the wrong address.

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Yes, a Conservative government will encourage home ownership; yes, any government will want decent housing for families, and yes, ideally, it would help if more older people “downsized”. For a long time now, though, all the incentives have been directed towards first-time and younger buyers. Unsurprisingly, the effect has been to inflate prices all the way up the chain.

Why not direct the incentives instead towards downsizing, by encouraging companies to build not starter, but retirement homes? It would increase competition and choice and perhaps even reduce prices. How about encouraging councils to see well-sited retirement complexes as an asset, rather than a potential drain on their resources? And if it really wants to promote downsizing, the government could remove some of the biggest disincentives, such as stamp duty.

The point is that, if this end of the housing market were freed, then more families would be able to trade up, and then more first-timers would be able to buy. So long as all incentives are directed towards helping young people onto that maybe mythical “ladder”, there are likely to be blockages further up.

Help the downsizers instead, and the need to clog even more floodplains with new “starter homes” and despoil even more green fields with executive estates could start to fall away. There might then be a chance that town and country, home-owners and not, young and old could bury the hatchet and start to make common cause.