Memorandum by the Retirement Housing Group
(CRED 17)
SUMMARY
— The housing market is a continuum
and first-time buyers are an essential element, enabling other
sellers to move up, while the availability of options for elderly
owner-occupiers to move to specialist accommodation, if they wish,
is crucial to releasing under-occupied family sized housing.
— There is a market for homes for elderly
people who do not move home because choices are not available
to them but most of them cannot move because of the freezing of
the mortgage market as a result of the "credit crunch",
which prevents mainstream buyers from purchasing their existing
homes.
— Retirement housing developers are
not immune from the problems of the mainstream housing market:
a number of them are experiencing significant financial problems
and some have withdrawn from this sector of the industry.
— The Crosby Review of Housing Finance
is crucial to our sector of the housing market. The Council of
Mortgage Lenders has proposed a system of support for them to
raise new bonds or mortgage instruments. We support this proposal,
without which the potential that Baroness Andrews has identified
cannot be fulfilled.
— The measures taken by the Government
and the Bank so far to restore liquidity in the housing market,
alhough welcome, have focused on assisting first time buyers and
do nothing to relieve the blockage in housing chains beyond the
bottom end of the market. Older owner occupiers are being denied
the opportunity to move into accommodation that better meets their
needs.
BACKGROUND
1. The Retirement Housing Group of the Home
Builders Federation consists of retirement housing developers
and housing managers, both RSL and private sector. Its ex officio
members include representatives of the charity, the Elderly Accommodation
Counsel, and the Association of Retirement Housing Managers. The
Advice and Mediation Service (AIMS) of Age Concern is also represented.
Its members are therefore involved in the building, management
and provision of advice on housing for sale and for rent for people
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.
RHG'S RESPONSE
2. We would particularly wish to address
the first question and third questions raised by the Committee,
viz the achievement of the Government's housing targets for both
market and social housing and measures to help existing and prospective
homeowners affected by the credit crunch.
3. The housing market is indivisible and
is a continuum. First-time buyers are an essential part of the
housing ladder, enabling other sellers to move up, while the availability
of options for elderly owner-occupiers to move to specialist accommodation,
if they wish, is crucial to releasing under-occupied family sized
housing into the market for families and younger people.
4. Currently all the elements in the housing
market chain are frozen by the effects of the credit crunch on
mortgage supply. The Council of Mortgage Lenders has said that
new mortgage lending will fall from £108 billion in 2007
to £40 billion this year and, more importantly, they anticipate
zero net new lending in 2009.
5. It is therefore worrying to see the comment
of Baroness Andrews in the Housing and Regeneration Bill in the
House of Lords on 7 July when she said:
"I know that the housing market is in difficult
times. Frankly, though, one of the arguments I would put to the
housebuilders is that there is a market for homes for elderly
people, who have proportionally far more wealth than they have
had before, with the equity in their existing homes, but who do
not move home because choices are not available to them. I say
to those housebuilders: think about that market, and about the
social homes you could build that would appeal to people who at
the moment are stuck in larger, inappropriate houses. I do not
buy the argument that this is not an economic benefit to house-builders
themselves".
6. The reality is that, although most elderly
owner occupiers will be downsizing and will not need a mortgage,
the prospective purchasers of their existing home (or others further
down the chain) will certainly do so. Without a sale, an older
person cannot move to a more appropriate home. Moreover as house
prices fall the elderly vendor will not have sufficient capital
from the sale to invest in future payments for the service charges
in housing with care.
7. Contrary to popular belief, retirement
housing developers are not immune from the difficulties that mainstream
housebuilders are facing as a result of the credit crunch and
a likely recession. A number of them are experiencing significant
financial problems and some have withdrawn from this sector of
the industry.
8. There is a wide range of providers of
housing with care, both for sale and for rent, which should be
encouraged to expand to offer the range of choices the Department
has repeatedly said it is seeking, most clearly in its National
Strategy for Housing in an Ageing Society. In a speech on 26 February
to the Age Agenda Conference 2008 Baroness Andrews said:
"We will need more specialist housing in
the future, offering more choice across the spectrum—from
retirement housing to nursing homes|We need a new positive vision
for specialised housing for older people as somewhere that more
people aspire to live in later life and which will match their
lifestyles. We need more good quality specialised housing of different
types to promote greater choice".
9. This range of housing with care can be
made available if the housing market is functioning. However,
like all other participants in the market, it is suffering because
of the shortage of mortgages.
10. The Crosby Review of Housing Finance
is crucial to the entire housing market, including this sector.
The Council of Mortgage Lenders has proposed a system of support
for them to raise new bonds or mortgage instruments. We support
this proposal, without which the potential that Baroness Andrews
identifies cannot be fulfilled.
11. The measures taken by the Government
and the Bank thus far to restore liquidity in the housing market
are welcomed. However, many of the initiatives are focused solely
on assisting first time buyers and do nothing to relieve the blockage
in housing chains beyond the bottom end of the market. Hence,
older owner occupiers are being denied the opportunity to move
into accommodation that better meets their needs. The constraint
on the ability of an older person to move into more appropriate
housing is such that they feel an increased sense of isolation
and vulnerability, reducing the sense of wellbeing and resulting
in deteriorating health conditions—with a consequential
cost to the public purse.
12. The Government's objective is to ensure
a decent home for all sectors of the community, including older
people. It is important therefore that the Government ensures
the provision of good quality housing in the right place and at
the right time, responding to the aspirations, changing lifestyles
and needs of older people. It is important that every effort is
made to deliver a range of housing choices for older people and
that they are able to exercise that choice, particularly when
one considers that by 2026 older people will account for almost
half (48%) of the increase in the total number of households,
resulting in 2.4 million more older households than today.
|
