Family homes versus lifetime homes      

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Twenty years ago Philip Yorke studied Construction Economics and Management at UCL, Bartlett. In this article Philip asks why younger generations cannot have family homes?

More flats than houses

Back when I was a student, my economics professor, Graham Ive, made a point that stuck with me; there are a greater number of flats/apartments being built than houses and the price gap between the two is growing. Furthermore, this trend was due to continue in the forceable future. This fact made me determined to be on the right side of the equation, given my wife and I were thinking about starting a family of our own and were living in a one-bed flat at the time.

So what can be done to help new young families get a family home, by that I mean a house with a garden? After all, that is the culturally accepted desire that is for many only a dream for today’s young people. The obvious answer is to build more houses in order to level out supply and demand.  But this answer competes with a desire for green spaces, the need for farmland and wild natural spaces for which England is the least biodiverse in Europe.

Another answer is to make better use of the existing housing stock by freeing up houses that are owned by those that do not have children, the largest group of which is most certainly empty nesters and the retired.

So what are the blockers?

Legislation and certification

Building regulations and certification processes used by developers/house builders  have created dwellings that can be “forever homes”.  Both the building regulations, which are mandatory and certification processes, optional unless part of Town Planning conditions, are often desired because they appeal to the developers’/house builders’ target markets. The push by the Equalities Act (formerly Disability Discrimination Act), embodied in Approved Document M, has created a system where dwellings should be designed to be appropriate for an intended user.  The Lifetime Homes certification process creates a house that literally is suitable throughout the changing needs of a person as they grow old.  So more and more we build houses that remain practical for a lifetime where previously they were not. Many older houses only have toilets upstairs, many newer houses have toilets, indeed wet rooms downstairs. The legislation of course was created for the right reasons, but as so often happens, one solution creates another problem.

Emotions

The biggest blocker to freeing up housing stock, has got to be emotions. People work hard to attain their goal of being a homeowner, creating their desired environment in which to bring up their children, so it is no surprise that over time attachment grows and a house becomes a home. We can break down the reasons into numerous categorise such as:

• Mine – I worked hard to buy this house, pay of the mortgage, its mine and I can afford to keep it
• Stuff – Over time we collect things, store them in our lofts, garages or under beds.  What do we do with it all if we down scale!
• Eternal parenting – It’s the desire to retain a safety net for children that are grown up and have left home. If anything goes wrong you can always come back here
• Location – I know the area and people, it has all the shops and services I need and I like it here. This is also linked to the next point
• Afraid of change – This is all too often what happens as we get old. I have seen this with my own parents
• Die at home – Again I have seen this with my grandmother, mother and aunts & uncles. There is often a strong desire to pass-away in the comfort (emotional) of your own home, in familiar surroundings of possessions and memories
• Often “wild horses” will not be enough to get someone to move. Previous IF research, which comprised asking focus groups what they thought the barriers were to them moving, delivered similar results.

What can be done?

The options are fairly limited and consist of policy mechanisms that can be split into; the carrot and the stick.

Rescinding stamp duty is a carrot as this would encourage some elderly people to move and downsize. There have been some moves on this with the introduction of downsizing relief. This allows homeowners to use the value of a previously-owned home to offset inheritance tax (IHT). It works by reinstating the residence nil-rate band (RNRB) that the seller would have been entitled to, had they not downsized.

A Mansion Tax, as proposed by the labour party some time ago, proved unpopular. Unsurprisingly it is a stick, and a stick that effects the grey vote the most. It would take a brave party to make this policy.

Apart from that there is only one solution; build more houses. This would level out supply and demand in order to bring house prices down and reduce the growing cost gap between a flat and a house, making upscaling more affordable for new families.

However there could be an upshot to a less well-off society! For homeowners, a house is often more than a home. It is an investment and/or a retirement fund. We expect our houses and flats to increase in values over the years, in fact many of us bank on it. But with a past generation of homeowners with comfortable pensions, many simply do not need to cash in this investment.  However, times are changing and becoming harder. A world with worse pensions, less savings, and higher taxes, will probably impact on a proportion of homeowners.  As with these things, there is a significant economic lag and it will probably take decades to show any results.

Build, build, build

So for young families today the odds are stacked against them. There simply are not enough houses available to become family homes and the cost gap makes houses unaffordable to many.  For more recent housing stock, the design regulations and certification processes enable the elderly to stay in their houses, their ‘forever homes’. Meanwhile, the biggest issue remains an emotional attachment at an age when change is hard to contemplate. Politics does not help either with political parties pandering to a growing grey vote.

So what is the solution? Unless there is a cultural change towards high-rise homes and families get used to taking a lift from their apartment to enjoy green spaces, the fact remains, that there can only be one solution and that is to build more houses.