At the same time, there is a shortage of suitable properties for people aged over-55 wishing to downsize. This had led to an increase in under-occupied properties and a shortage of full-sized homes for young families.
Is it the cost of moving or a lack of suitable homes that is casing this blockage?
A taxing question
Older property owners are likely to have built up considerable equity in their homes, so targeting a tax break at “last-time buyers” could prove controversial. But considering the impact on the overall housing market, Prof Mayhew is surprised the tax incentive to encourage older people living alone in large properties to move has not been considered.Currently, the taxes and fees involved in moving to a smaller property often make it cheaper to stay put.
While first-time buyers pay no stamp duty on properties valued up to £300,000, older people wanting to move to a three-bedroom apartment in a popular area could pay tens of thousands. They also face selling and removal costs.
Prof Mayhew says there is no incentive for older people to give up their family homes — even if the right properties to downsize to were available.
“In truth, the main reason most people don’t move into smaller properties in later life is that there is a chronic shortage of suitable and desirable alternatives — and a lack of support to make a move,” says Dr Rachel Docking of the Centre for Ageing Better (CfAB).
“A tax break is no good if there’s nowhere within 30 miles that you could actually live in. Our ageing population has exposed the shortage of diverse housing options that are suitable for people as they grow older.”
Prof Mayhew argues that the types of homes being built must be better aligned with demand, which is increasingly dictated by the needs of an ageing society.