I recently attended a gathering of over-50s in an affluent part of London, of whom I expect I was the youngest by three decades. At some point, one punter mentioned the “sea of money” apparently floating around, whereupon another quipped that it was actually more of a carpet, because so many people were “sitting on it”. This was news to me, but after reading the Department for Communities and Local Government’s English Housing Survey “Housing for Older People Report, 2014-15” this week, I think I might be beginning to see what they mean.
One of the most startling facts to come out of this report is that households with the oldest person under 55 (“younger households”) have median equity of £127,000, compared to £220,000 for those with the oldest person over 55 (“older households”). These are not mean figures pulled from the wealthiest sector of society; they are medians that reflect a widespread intergenerational gulf in personal wealth. The average salary for 2014–15 of £27,200 pales into insignificance when compared with such figures.
Not only that: despite under-55s constituting the majority of the working population, the median income for younger households after housing costs was £19,000, £3,000 lower than that for older households. This is indicative of the punitive rent and mortgage interest payable by younger generations. Among younger households, 29% of were renting and 44% were paying off mortgages in 2014–15, compared with 7% and 15% respectively for older households. This situation constitutes a notable decline since 1994–95, when 12% of younger households were renting while 61% had mortgages and were at least able to get onto the property ladder.
It is a common misconception that the housing crisis in this country is a result of inadequate supply. That is laid bare by this report. A full 51% of older households were found to be under-occupied, as opposed to the (still surprisingly high) figure of 23% for younger households. Proponents of intergenerational fairness are not suggesting packing older people into tiny flats like sardines: these statistics include only those households with two or more unused bedrooms. When you juxtapose this fact with the above ones about the numbers of younger householders who don’t have a home to call their own at all, you can see the intergenerational (and in some cases intragenerational) injustice at play here.
If anything, this seems to be a continuing trend. While the report does not include statistics on historic under-occupancy, it does say that the average floor area of younger households has remained constant in the last twenty years, being 85m² in 1996 and 86m² in 2014. Meanwhile, the floor area of older households has actually risen from 84m² to 95m². This is made even more pertinent by the fact that 38% older households are lone households, as opposed to 19% of younger households. Not only are older generations occupying larger properties, there are actually fewer of them per household doing so.
These issues are not new. IF has been talking about the importance of downsizing for several years now. The results of this survey, however, show that there is still a way to go. Only 15% of older households were found to have moved because they wanted a smaller property and 5% even moved because they wanted a larger one. There is no suggestion that older households should be moving exclusively in order to downsize, or that they should never acquire larger properties, but these ratios are insufficient to reverse the current trends.
This report clearly contains a lot of reasons for concern. I would like to end, however, on a more positive note. While older people’s living arrangements remain a huge intergenerational problem, at least the issue is now widely recognised. A few years ago, the English Housing Survey did not even mention downsizing in their headline report. Now, 40 pages and hundreds of man hours are devoted to older demographics’ housing arrangements. Progress is being made. The very existence of this report is testament to that.