Memorandum from Care and Repair England (CRED 32)

 

This submission concerns the Committee's interest in:

 

■ measures to help existing and prospective homeowners affected by the credit crunch

 

 

Summary of Key Points

 

■ A third of all households are occupied by older people and the majority of those older people (65%-84%+ dependent upon age cohort and location) are home owners.

 

■ Whilst older people are less likely than younger homeowners to face difficulties with mortgage availability, there are two particular impacts of the credit crunch on this sector of the population that have not been addressed by the proposed government measures to date:

 

1. Problems faced by older people who need to move to a more suitable home but who are unable to do so because of the seizure of the market and

 

2. Problems faced by older people with the repair, maintenance and adaptation of their existing home for a range of reasons, including reduced confidence in the use of equity release at a time of falling house prices and rising interest rates.

 

■ Both of these effects impact on the delivery of a range of objectives in the Government's housing strategy for an ageing society, 'Lifetime Homes, Lifetime Neighbourhoods'.

 

■ This submission makes the case that consideration needs to be given to options for helping older people whose housing situation is being affected by the credit crunch.

 

 

1. About Care & Repair England

 

1.1. Care & Repair England is a national charity established in 1986 to improve the housing and living conditions of older and disabled people.

 

1.2. Its aim is to innovate, develop, promote and support housing policies and initiatives which enable older and disabled people to live independently in their homes for as long as they wish.

 

 

2. Basis of Response

 

2.1. For a number of years we have been working with local older people's groups across England in order to raise the profile of older people's views about their housing and related needs and aspirations during retirement and to identify shortcomings in the current provision of housing and neighbourhood design for an ageing population.

 

2.2. We have worked with local authorities and older people with the objective of increasing the level of engagement with the latter in shaping local housing strategies in ways that are rooted in the everyday experience of older people.

 

2.3. One of the services that we have pioneered and promoted is that of 'Housing Options' or 'Move On' services that support and enable older people who are finding their current home difficult to live in to look at alternatives and to then to move home.

 

2.4. We have been receiving ad hoc feedback from local older people and local service providers about the impact of the credit crunch and the seizure of the housing market. In the time available we have not carried out a systematic review of local experience, but his submission is based on the general feedback to date.

 

 

3. First Key Issue: Problems faced by older people who need to move to a more suitable home but who are unable to do so because of the seizure of the housing market.

 

3.1. One consequence of the seizure of the housing market is that growing numbers of older people are locked into living in an unsuitable and inappropriate home.

 

3.2. This has potential impacts on the health and well-being of those older people, with consequences for the provision of social and health care.

 

3.3. One direct consequence is a potential increased need for help with adaptations to the home and higher demand for Disabled Facilities Grants.

 

3.4. A more fundamental problem is with the delivery of one of the aims of 'Lifetime Homes, Lifetime Neighbourhoods' - that of enabling greater housing choice in older age through improved advice and information. Older people may well wish to move home and seek advice about alternative housing options but find themselves unable to move home under current circumstances.

 

3.5. One example that has been brought to our attention is that retirement housing provider McCarthy Stone is experiencing high levels of interest and viewings but a collapse in sales because prospective buyers are unable to sell their existing property.

Options for Consideration

 

3.6. To financially support (through Regional Housing Pot funding) and actively encourage both the social rented and the private housing sectors to develop and implement innovative solutions to the inability of older people to sell their existing home and move to a more suitable home.

 

3.7. This would include an assessment of the practical barriers and steps needed to remove these, such as changes to welfare benefit and taxation rules to facilitate solutions such as delayed sale and temporary rental or leasing arrangements on retirement and supported housing.

 

3.8. To re-allocate under-spent new build housing funds to provide fast track, urgent adaptation and repair grants to assist older people facing particular problems in their existing property. This might be particularly linked to hospital discharge and avoidance of care home admission.

 

4. Second Key Issue: Problems faced by older people with the repair, maintenance and adaptation of their existing home for a range of reasons, including reduced confidence in the use of equity release at a time of falling house prices and rising interest rates.

 

4.1. Older home owners, particularly those of 75 years and over, are the most likely group to live in non-decent housing.

 

4.2. A key part of government policy with regard to the maintenance and improvement of the owner occupied sector has been to encourage increased use of equity release to meet those costs.

 

4.3. As well as encouraging commercial loan development, funding has also been allocated to encourage regionally supported 'social' loan schemes.

 

4.4. To date this has been with mixed success, particularly with regard to take up by the 'older old' who are more likely to be living in poor housing but less willing to borrow.

 

4.5. One of the potential impacts of the credit crunch is an even greater level of worry and concern about using equity release, given the drop in the value of property and rising interest rates.

 

4.6. In addition to loans for repair, there has also been a localised shift towards offering loans for home adaptation instead of a grant. Again, there are concerns that the credit crunch and house price falls might make those in need of a home adaptation less likely to go ahead with the necessary work. This may in turn have consequences for health and social care providers.

 

Options for Consideration

 

4.7. To use under-spent new build Regional Housing Pot funds for minor works grants to fund essential home repairs and adaptations for lower income older home owners, particularly where the property improvement results in reduced health risk to the occupant.

 

4.8. To use Regional Housing Funds to make existing loan funds more attractive, such as via a fixed charge on a property, capped to a percentage of the value and with no interest added.

 

November 2008