The report, which was written by Professor Les Mayhew of the Cass Business School, at City University, examined the impact that increasing life expectancy will have on UK society and found that too many older people are living in unsuitable housing. This perpetuates the housing crisis and stores up problems for the future.
The UK population is expected to increase by 10 million over the next 25 years, with much of that due to people living longer. This has implications for the housing market and those working in the industry are looking for innovative ways to adapt to the new demands.
The report recommends that government policy and industry focus should move away from first-time buyers to look for ways to cater to over-65s. The benefits of finding the right housing for retirees, it concludes, will have benefits for all of society and help to prevent an overall decline in living standards.
Measures could include introducing incentives to downsize and making it easier to release equity, as Mayhew explained: “A better alignment of the housing stock with housing needs, along with improved financial incentives, would significantly alleviate housing pressures to the benefit of all.”
He added: “Equity release, which has an impact on both lifestyles and potential legacies, becomes an important part of the choices facing those who own their home.”
Last week, Mortgage Solutions reported that the rise in retirement interest only mortgages was one way that lenders are trying to meet the demands of older borrowers.
Industry reaction
Figures from the mortgage industry have welcomed the report and been quick to respond to its findings.
Stuart Wilson, corporate marketing director at More 2 Life, said: “We need to be doing more to meet the housing needs of an ageing society. While in an ideal world, older homeowners may choose to naturally downsize at retirement – releasing equity and encouraging movement in the housing market – we don’t live in an ideal world.
He cited a lack of suitably-sized properties, high moving costs and emotional attachments to family homes, as reasons for some retirees being reluctant to downsize.
Wilson continued: “We need to consider how we can help older homeowners make choices around retirement that benefit the wider society.
“Whether it is focusing on improving the availability of suitable properties or encouraging everyone to think about how housing equity can be used to improve their retirement finances and help their families, it’s important to move the debate along and this is what the CSFI report had done.”
Nick Sanderson, CEO Audley Group, said: “Simply building more homes is not enough. It’s crucial that the housing market becomes more aligned to the changing needs of today’s society.
“There are nearly 10 million people in the UK aged 65 or over, a number that is forecast to rise by 20% over the next decade, yet just two per cent of housing stock is designated as retirement housing.
“The government must prioritise incentives and schemes to support the building of specialist retirement properties and encourage downsizing. The onus shouldn’t sit solely with the government however, the whole housing sector, including mortgage lenders and home builders, must be more innovative to support older home buyers.
“If done correctly, the entire country will reap the societal and economic benefits.”
