Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence


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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