A new report suggests the Stamp Duty exemption should be extended to last-time buyers.
Research by the Cass Business School and the Centre for the Study of Financial Innovation, said elderly people should be encouraged to downsize, but warned the lack of age-friendly housing in the UK limits the options for millions who are open to moving but decide to stay.
The report, titled Too Little, Too Late? Housing for an ageing population, found that under-occupation is concentrated among the elderly population – those aged over 65 – where people tend to live in couples or alone.
It claims there are more than 15m surplus bedrooms in the UK, which could rise to 20m by 2040 if no action is taken.
The report recommends a Stamp Duty exemption for ‘last-time’ buyers – similar to the relief offered to first-tine buyers – worth up to £300,000 to encourage older home owners to downsize and free up housing stock.
The Government should promote the benefits of downsizing and incentivise people to do so before social care is needed, according to the report.
It also calls for local authorities and developers to plan for retirement housing.
Professor Les Mayhew, author of the report, said: “If more family homes were freed up by downsizing, the benefits would cascade down the housing ladder because it would enable families to ‘upsize’, allowing more first-time buyers on to the bottom rung.
“More efficient use of the existing stock would reduce pressure to ‘just build more’ as a solution to the UK’s housing shortage.
“The demand is out there as baby boomers seek to redeploy housing equity into smaller, more convenient homes with independent living and easy access to services. This would also reduce pressure on local authority spending through transfer to care homes and allow more efficient delivery of social care to individuals.”
Commenting on the report, Nigel Wilson, chief executive of Legal & General, which is helping fund more retirement housing, said: “Our housing stock needs to work for everybody.
“People of all ages need more supply of housing and better choices.
“We know there is strong demand for the right sort of housing for later life living, with great design, supportive communities and good access to friends, family and facilities.
“Housing policy now needs to catch up with the demands and opportunities of our ageing demographic: getting this right has benefits for everyone.”
Amy Wray, owner and managing director of Yorkshire-based agent Applegate Properties, said: “Whilst many last-time buyers may not actually require a reduction in Stamp Duty to make their move possible – as many have equity in their property – the passing of this exemption alone would raise huge awareness in the UK surrounding the amount of current empty bedrooms. Additionally, it would encourage many home owners to re-think their position once their families have flown the nest.
“Creating an awareness around ‘downsizing to support growing families’, would greatly motivate thousands of potential sellers to make the move sooner, rather than feeling an emotional responsibility to ‘cope’ with their now oversized family home.
“So many home owners have never even considered that they are contributing to the shocking statistic of there being 15m empty bedrooms.
“Therefore, such awareness could make for a huge shift in the mindset of all purchasers, making downsizing earlier the ‘new normal.’
“Good quality, over-55s retirement housing – with 24-hour wardens, maintained gardens, lifts and optional social areas – are hugely popular, so much so that we have a waiting list if any of these homes become available.”