Lyons Review of Housing Policy proposes creating greater incentives for downsizing

The recently-published Lyons Review of Housing Policy undertaken by the Labour Party has advocated that older people could be given greater incentives to downsize, explains David KingmanDownsizing, 3D render of reducing house size 1

Meeting the housing needs of Britain’s ageing population was one of the key themes to emerge from the Lyons Review of Housing Policy that was published by the Labour Party on 16 October. The report made a strong case that – as half of all the projected household growth between 2014 and 2021 is projected to take place in households that are headed by someone aged over 65 – Britain’s housing system needs to come up with innovative new ways of adapting to their needs. They recommended a range of key policies which could have a significant impact on the supply of housing for older people.

Incentives for downsizing

One of the suggestions made by the Lyons Review is that older households could be given greater incentives to downsize into smaller properties, as this would free up family-sized houses for younger people while enabling older people to move into accommodation that has lower running costs and is physically more manageable for them.

The Intergenerational Foundation (IF) submitted evidence to the Lyons Review based on our research into downsizing, which argued that there could be as many as 25 million “missing” bedrooms in England where no-one sleeps on a regular basis because they belong to households that are officially classified as “under-occupying”. IF’s 2011 report into the problem of under-occupation – Hoarding of Housing: The Intergenerational Crisis in the Housing Market – found that a third of all English householders were under-occupying their homes in 2009/10, with the two largest groups of under-occupiers being pensioner couples aged 50–79 and single-occupant pensioner households. IF argued that this is an incredibly wasteful use of Britain’s existing housing stock when there is a national shortage of housing that people can afford, and especially as growing numbers of children are being forced to grow up in overcrowded housing.

This was supported by further evidence derived from IF’s follow-up study, called Understanding Downsizing, which used interviews with a group of pensioners who had downsized to form a picture of what their experiences had been. This study found that the downsizers regarded it as an overwhelmingly positive experience, as they had been liberated by having smaller energy bills, a smaller house to maintain and less gardening to do. These two reports led IF to advocate that the government should do more to encourage older households to downsize, with tax breaks for downsizers being an obvious policy lever that could be implemented.

The section within the Lyons Housing Review devoted to improving the housing options for older households expressed agreement with this sentiment, as it advocated that older households should be encouraged to downsize in order to free up family homes and to increase the volume of transactions in the housing market.

One option which the Review suggested was that older households could benefit from plans discussed elsewhere in the Review to make it easier for people to develop self-built or self-commissioned housing projects, as this would enable asset-rich older households to develop their dream homes. On the tax side, the Review echoed IF’s suggestion that stamp duty incentives could be considered to help encourage older people to downsize, although it acknowledges that the public-spending implications of this would need to be analysed further.

Is design the key?

The Lyons Review also particularly stressed the importance of good design in providing housing that is specifically aimed at older households. They advocated that all new housing aimed at older people should follow the guidelines which have been developed by the “Housing our Ageing Population Panel for Innovation” (HAPPI), a group of housing experts which has come up with a range of features that they think all housing aimed at older people should embody, such as being energy efficient and well-insulated.

The Review also praised some of the bespoke retirement housing developments that have already taken place, such as the Panel Croft Retirement Village near Birmingham, which is the result of a partnership between Birmingham City Council, the Homes and Communities Agency, the Department of Health and the ExtraCare Charitable Trust.

Although it is still too soon for the Labour Party to have converted most of the findings from the Lyons Review of Housing into official policy, it will be interesting to see what the party has to say about housing for older people at the 2015 general election.