Hoarding of Housing: the intergenerational crisis in the housing market

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Matt Griffith


19 October 2011

In this research study – undertaken on behalf of IF by housing expert Matt Griffith – IF calls for a new approach to try to solve the housing crisis facing young people.

Britain has a national shortage of good-quality, affordable housing. Most policy interventions in the housing market aim to either boost supply (which has proved extremely difficult) or improve access to finance (which tends to just stoke house prices even further). In this report, IF argues instead that we need to look at how our existing housing supply is allocated between different types of household – in particular, drawing attention to the national surplus of 25 million spare bedrooms in houses which are officially “under-occupied” across England.

This report argues that this is an intergenerational problem. Much of this spare capacity belongs to elderly households who still live in family-sized houses after their children have grown up and moved out. Meanwhile, younger households are being blocked from getting on the property ladder, and suffer the highest levels of overcrowding.

IF argues for a series of targeted policy interventions which seek to encourage older households to downsize – a move which has become less common among older households in England compared to other ageing countries, such as the USA. If we can unlock the spare potential that exists within England’s existing housing stock, we can go a long way towards solving the housing crisis without having to negotiate all the obstacles that have prevented new homes from being built.

Posted on: 19 October, 2011

7 thoughts on “Hoarding of Housing: the intergenerational crisis in the housing market

  1. John Graham

    A very good report with a strong analysis of the housing market which reveals the dynamics that will be some of the drivers of significant change in society in the next 30 years.
    The title of the report may have successfuly been chosen to grab the headlines, but it detracts from the opportunity that this situation presents. Equally disappointing is the fact that the concluding recommendations concentrate on push factors rather than pull incentives, which has produced a predictably negative political knee-jerk reaction.
    Older people don’t want smaller accommodation but they do need more suitable housing to meet their need for low maintenance costs and easy mobility. The other key issue which is understated in the report is the need older people will have for better domicilary health and social care.
    In the USA these twin pressures created a substantial demand for retirement communities 25 years ago. This market is only just starting to emerge in the UK , but it is a much more positive reason to move house than a few small tax concessions.

  2. M

    If an older person owns a large house, it is by that very fact going to be worth a considerable amount of money. By deciding to downsize to a house and garden, that is smaller and more manageable, capital often a sizeable amount of capital will be freed up to pay for the moving costs/ stamp duty.

    Why does society need to financially help these asset rich people?

    It is not lack of available larger sized homes, that prevents families moving up the housing ladder, it is lack of affordability.

    However, those in social housing, of which I know many, happily ensconced pensioners living alone in three bedroomed houses should be through their tenancy agreement automatically downsized, once their families have left home.
    It is a wrong that they are able to ‘house block’ family homes, while young families are holed up in flats.

  3. Caroline

    With the retirement age rising to 67 and people having their families at older ages I think that you have shot yourselves in the foot by targeting those over 65 as house hoarding. If there were helpful nudges for those entering their eighties to downsize it would be more appropriate. By then children are likely to have their own homes and grand parents are not so likely to enjoy having large numbers of family come to stay with them.
    There were fiscal advantages to enabling part of the family to take over the family home, depriving the very elderly of capital. They then become eligable for free social care. This works well for those with only one child. If there are more children, however, there are capital gains implications for those receiving money.
    A fresh look needs to be taken at the overall picture for those in their 80s and 90s. Please do not think that having finally bought your large family house, paid off the mortgage, decided you can actually retire and had the children move out that you should immediately downsize rather than enjoy the products of your labours. If nudges were available from 75 it might enable more people to down size before they cannot intellectually and emotionally cope with doing so.
    Before the EU it was not unusual to have live-in help for the elderly. But with the working time directive this has become difficult. Keeping a room for visitors or a career is not an unreasonable expectation. Of course this is not a new controversy, I think one of the reasons for Mrs Thatcher’s Poll Tax instead of Rates was to help little old ladies alone in big houses. Perhaps there needs to be more help for them in facing changing their lives and letting go of some of the things they have taken pride in accumulating and treasure. Oh, that’s what door to door antique buyers do! This is a very difficult area and elder abuse must not become part of government policy.

  4. stephen

    It is well known that housing developers have taken financial advantage from calling houses ‘4 bedroomed’ when the internal space is really only suitable for 3 bedrooms and so on.

    Maybe it is time to re-define what age group we mean by ‘older/elderly’ (taking into account 60 is now considered to be the new 50) for which there is probably a new type of housing design needed that doesn’t automatically mean ‘downsizing’.

    What we should be encouraging is the development of new housing suitable for ‘active’ older people which might include only two bedrooms without losing internal space.

    It is well-known that in other parts of Europe houses are not crammed with sub standard sized bedrooms in this way, you only have to visit France to see that.

    Yes, as has been said the title of the report has been given a deliberately ‘provocative’ title and this has raised many important issues, I have no argument with that.

  5. Alex Webb

    Older people are not just left to stay in larger properties. Very many choose to go into smaller properties, supported housing etc. themselves. Housing Associations and ALMO’s have incentives and support in place to help people to relocate. When older residents received their tenancy they weren’t expected to be made to move in later years to make way for families who choose not to work.

  6. Steamdrivenandy

    We moved house two years ago from North Yorkshire to North Staffordshire to be near our first grandchild. We were looking to downsize but failed to find anywhere suitable. There were very few bungalows on the market and those that were available were very highly priced for very dated, small, awkward layouts. New houses were mainly built over 3 floors (thanks to John Prescott for that) and most were 5 or 6 bedrooms with a garden the size of a pin-head. They were also on estates that were totally clogged by cars all weekend – horrible.
    The house we eventually bought had been on the market for two years and empty for most of that time. It is just around the corner from a local village school, has 4 big bedrooms, 3 reception rooms, a decent size (100sq ft) utility for our two bearded collies and an adequate, but not large garden. We bought it for the same price as our North Yorkshire home sold for and negotiated a reduction of £84,000 on the original asking price. Now tell me why no families with kids got this house before us? I can’t figure it.
    Incidentally our grown-up son moved back home earlier this year after deciding to take the plunge as an independent video game designer and our fourth bedroom is stacked full of music, equipment and textbooks for my wife who works as an independent choral director and adult education teacher.
    We tried to downsize and if we had done my wife wouldn’t have needed to work and therefore our space needs would have reduced, but would we have been able to accommodate our son?
    Unfortunately builders seem to design for young families or occasionally old people’s flats but if you’re 50 to 70 you need something that’s in between these two stereotypes and nobody builds for that market segment so people stay stuck in stuff that’s too big.

  7. Prester John

    Like it or not, many people in their 60s and 70s have as a prime objective the passing on of their wealth to their children and grandchildren, as well as maintaining a cushion of capital for their old age (80s and 90s).

    Retaining a large house, for many, remains an important part of that strategy. It is partly the British obsession with housing as investment, and partly the appalling performance of our financial institutions in looking after our savings.

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