Older people should downsize their homes, says City watchdog

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.’




2 thoughts on “Older people should downsize their homes, says City watchdog”

  1. Anonymous says:

    So Saga says it’s insulting, and then basically agrees with what they say

  2. Jive Bunny says:

    Lynda Blackwell has clearly, completely lost the plot, no wonder she’s a civil servant!

    The real financial issue is affordability. These, er, “very big” houses will not suddenly collapse in price even if there is a sudden glut of them. The best that would happen is that their price might reduce by up to 5%, but most young families simply can’t afford anything given their other luxuries that they are very reluctant to give up. The only thing this “initiative” is likely to achieve, if “successfully implemented” is a large number of empty properties!

    She needs to wake up and start exploring ways to freeze house prices, reduce demand and working with the DOTI encourage higher wage rises to make existing housing more affordable.

    There is also a social cost, as she is championing a process of isolation whereby elderly people are to be “encouraged ” (coerced) into moving out of their neighbourhoods where they know their neighbours into multi occupancy structures where they will be in a small flat and know no -one, with failing health making it much more difficult to go out and make new friends and they will also be segregated and put away from the rest of society, no longer forming an integral part of society, thereby reinforcing the so called war of the generations.

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