18th September 2015
The City watchdog has told older people they should not rule out downsizing in later life and more should be done to move them out of homes that are too big for them.
Lynda Blackwell, head of mortgages at the Financial Conduct Authority (FCA), has said last-time buyers are a ‘real issue’ in Britain as it means family homes are being used to house older singles or couples who no longer need the space.
She wants the shortage of homes to be refocused away from first-time buyers and to last-time buyers, with more retirement homes built for older people to downsize into.
‘We’ve got a big supply issue in this country,’ Blackwell said at a conference for mortgage intermediaries. ‘’There’s lots of questions about whether it is right that the government should focus on the first-time buyer when we’ve got a real issue with the last-time buyer.
‘There’s old borrowers who basically pay off their mortgage and sit quite happily in a very big house. Does there need to be thought given to trying to encourage older persons to actually move away – build proper housing for retired people in the right place? There is a debate to be had about whether the government’s focus is actually in the right place.’
However, the FCA has drawn criticism from Saga, the financial services provider for older people.
Paul Green of Saga said: ‘If people have saved and paid for their house over their working lives, it’s down to them if they want to fill it with family or live on their own, but setting the generations against each other or talking about ‘tackling older homeowners’ is not just unhelpful it’s insulting.’
He added that recent research conducted by Saga and retirement village Wadswick Green found that two-thirds of older homeowners would like to move to a retirement home but there was a lack of appropriate properties or it was too costly.
‘One of the solutions Saga has researched is allowing one stamp duty free move for those right-sizing for retirement which, according to independent economists CEBR, would release 111,000 family homes onto the market. This is a win for older homeowners who want to downsize, but also for younger families that want to move up the ladder and also for the exchequer,’ said Green.
‘The research shows that by giving this tax free move it would be counterbalanced by an estimated £461 million of stamp duty that would be generated by the house sales that might otherwise not have taken place.’