Cross-party think-tank Demos has published a new report to encourage the supply of, and demand for retirement housing. Unlocking the housing market: Helping first time buyers by helping later life buyers explores the options available to encourage greater demand for and supply of retirement housing, including care villages and extra care housing.
The project considers the ways in which older people can be encouraged to move into these forms of housing, including financial incentives; as well as the financial factors which currently thwart supply – in particular focusing on the impact of the current Community Infrastructure Levy (CIL) and s106 regimes on the viability of retirement housing schemes and the options for their imminent replacement.
The objective was to set out a range of possible options to improve both demand and supply, and identify the most feasible way forward as the Government engages with the sector in order to implement the proposals as set out in the Housing White Paper.
This project, undertaken by Claudia Wood and Simone Vibert of Demos and commissioned by the Homebuilders Federation, involved extensive qualitative research with citizens and experts as well as rapid evidence assessments and economic modelling.
The research found that:
- Development taxes (Section 106 and CIL) are scuppering retirement housing development, which has enormous social value and helps free-up housing for young buyers and growing families.
- There is evidence of a looming crisis in the supply of housing for older people, as current policy favours developers building starter properties, rather than also supporting older people to downsize – which would spark a positive 'chain reaction' in the housing market.
- Demos’ focus groups with older people found widespread support for policies to help them downsize, including stamp duty exemption; practical help with moving; and opportunities to 'try before you buy'.
- The report uses new economic modelling to show the impact of planning charges on the viability of retirement developments – and concludes that only an exemption from these charges will tackle chronic under-supply in the face of significant and rapidly growing demand.