Memorandum by the Retirement Housing Group
(AH 23)
INTRODUCTION
1. The Retirement Housing Group of the Home
Builders Federation consists of retirement housing developers
and housing managers, both RSL and private sector, together with
the Association of Retirement Housing Managers. Its ex officio
members include representatives of the charity, the Elderly Accommodation
Counsel and the Advice and Mediation Service (AIMS) of Age Concern.
Its members are, therefore, involved in the building, management
and provision of advice on housing for those of retirement age
and over. Such housing ranges from lifestyle properties for the
active, newly retired through to warden assisted housing with
community facilities and design modifications through to very
sheltered housing with high staffing levels and many additional
services and facilities.
2. The Group has a wide-ranging interest
in planning and management issues, leasehold reform and Government
policy, of all kinds, which affects vulnerable groups such as
the elderly.
HOME INFORMATION
PACKS
3. This submission focuses on the likely
impact of the Government's proposal to introduce Home Information
Packs from early 2007 on housing supply and the affordability
of homes.
4. We note that ODPM is bringing forward
proposals for Home Information Packs because it believes that
this make the house buying and selling process more transparent,
faster and consumer friendly and has identified delay and failure
as largely attributable to the fact that key information is only
available after terms have been negotiated and agreed between
buyer and seller. It has concluded that a mandatory Home Information
Pack, provided at the start of the marketing process, will resolve
these problems by ensuring that information is available up-front.
5. There are two points to be made here:
firstly it has been estimated that only 4% of sales fail as a
result of information provided through a survey (other reasons
include failure to secure a mortgage or purchasers changing their
minds). Secondly ODPM has noted that the requirement to provide
a Pack could deter 10% of people from marketing their home (other
commentators have suggested the figure could be as high as 30%);
both ODPM and other commentators are agreed that the end result
will be that fewer properties will be put on the market. This
reduction of supply can only lead to intense upward pressure on
prices.
6. Older people are the least likely demographic
group to consider moving home. They are also the fastest growing
demographic group. Figures published by the Government Actuary's
Department on 20 October 2005 showed that the number of people
over state pensionable age is steadily rising, and will reach
15.3 million by 2031, exceeding the number of children from 2007.
The 85-year-old plus age group increased from 873,300 to 1,111,600
between 1991 and 2004 and, amongst those aged 65 and over, the
proportion aged 85 and over has risen from 7% in mid-1971 to 12%
in mid-2004.
7. Research recently carried out by Anglia
Ruskin University reveals growing levels of owner-occupation amongst
older people, and their tendency to remain in the home they were
living in at the top of their "housing career" ie in
their 40s and 50s, as they move into older age. It shows that
owner-occupiers who were aged 45-54 in 1991 took their high levels
of consumption of seven or more rooms with them into the 55-64
age group in 2001. A similar effect is experienced as the 55-64
year olds in 1991 age-on to 65-74 in 2001. This trend will continue
and grow as more people move into older age as owner-occupiers,
and as more people move into "older" old age as owner-occupiers.
8. The prospect of commissioning a Pack
before putting their house on the market, finding all the data
required for it, and having a Home Condition Report carried out,
together with the cost should no sale result, is very likely to
be a serious deterrent for many frail, elderly people. This will
not assist ODPM in its desire to reduce under-occupancy of family
sized homes by one and two person households. Furthermore frailer
older people who move to supported ("sheltered") housing
are likely to maintain an independent lifestyle for longer, an
objective supported by Government. This extended independence
also reduces the burden on social services and the NHS, which
is particularly significant, bearing in mind the demographic shift
in the population. If such people are deterred from selling, under-occupation
of larger houses will continue. Elderly people who are not selling
to buy again, but will be moving into nursing or residential care
homes, will find the cost of the Pack a "dead cost".
9. The introduction of the Pack, as currently
proposed, is therefore likely to reduce the number of transactions
and consequently the choice available to purchasers, slow down
the market and push up prices, whilst doing nothing to shorten
the time taken to complete the selling process.
10. In general, the conclusion can only
be that the buying and selling process will become considerably
more costly and will reduce the size of the market.
11. Overall, there are significant disbenefits
in the Pack as currently proposed. It does nothing to secure a
committed vendor or purchaser, adds to the costs borne by the
vendor, increases the amount of inessential information required,
reduces the size of the total housing market, and the size of
the new homes industry, the output of which is always a direct
function of the size of the total housing market.
12. As a result the choice available to
purchasers will be reduced and transactions will become more protracted,
contrary to the Government's intentions. The Treasury and ODPM
commissioned Kate Barker to enquire into issues affecting housing
supply in the UK in order to address imbalances and increase supply
increased. The HIP, as currently proposed, seems likely to hinder,
rather than help, Government in achieving this objective.
RECOMMENDATION
13. We note that, in a discussion on the
Home Information Packs in the House of Lords on 3 November, Lord
Phillips of Sudbury questioned how a dry run could be carried
out and evaluated during 2006 in time for the scheme to come into
effect by early 2007. He concluded, "In order to evaluate
it properly and objectively, and to learn the lessons, there is
no conceivable way in which that undertaking [by Lord Rooker during
the passage of the Housing Bill] can be met and the whole scheme
can be brought-in in early 2007".
14. Baroness Andrews replied on behalf of
ODPM that "It is very firmly our intention that six months
before the scheme will be implemented, with all the elements in
place, we will have a dry run to test how it works in practice
and to ensure that we have the industry with us, and that all
the instruments are fit for purpose. I hope that the noble Lord
will hold us to that account, because that is our intention".
We would therefore ask that this Committee requires
that proper time be allowed between a pilot scheme of adequate
length, whenever it takes place, and the implementation of the
Regulations, so that a full and proper investigation can be carried
into the outcome of the pilot and that this Committee should hold
a further Inquiry into it and the lessons it provides, for the
full introduction of a Home Information Pack so that the end result
is not to reduce the affordability and supply of housing.
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