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The Intergenerational Foundation charity no: 1142230 www.if.org.uk
The Intergenerational Foundation (IF) is a non-‐party-‐political charitable think tank researching fairness between generations. IF believes policy should be fair to all – the old, the young and those to come. IF calls for the government to consider the positive effects of downsizing. Incentivising older homeowners to downsize could free up homes and help address the current housing crisis.
The Young:
• High housing costs and insecure work patterns mean the young cannot save for their future (IF1, Y&P2). • 2014 UK median house prices have risen by 2.8%, while the incomes of 22–29 year olds have risen by 1%.3 • More than 1 in 5 young people (20–45 year olds) have completely given up hope of ever owning a home.4
The Old:
• More than one third of England’s 14.3 million homeowners are now aged 65 years or older. Just 1.4 million homeowners are aged between 25 and 34 years.5
• There are 25 million empty bedrooms and 5.3 million under-‐occupied homes (IF6, L&G7). • 51.5% of those aged over 65 now live in homes with two bedrooms more than they need. 50% of single households
where the owner is aged over 60 (3.7 million people) now have 3 spare bedrooms or more.6 • 50% of under-‐occupied homes are detached.8 • Under-‐occupation is increasing and has taken out almost a fifth of all new housing being built.9 • Pensioners are subsidised to stay in their homes with Winter Fuel Payments and Council Tax discounts while their
properties increase in value.10 • Inheritance tax reforms make it more rational to stay in the family home. • In 2014 Stamp Duty was reformed. This makes purchasing a smaller house increasingly financially unattractive.11
Intergenerational Consensus:
• There is growing consensus among old and young that older homeowners need to be offered greater incentives to downsize.12
• ILC, AgeUK, IF, RICs, BOE, FCA, CIH, L&G and Saga have all called for greater incentives for downsizers. • There are 3.3 million over-‐55s willing to downsize, predicted to grow to 3.8 million by 2020.13 • By encouraging older homeowners to downsize almost 3 million homes could be freed up.14 • By giving Stamp Duty holidays to downsizers we could get Britain moving. • This would provide downsizers with 2% or more in cash to spend in the economy as they could buy their smaller
property tax-‐free.15 • Stamp Duty holidays could be revenue-‐positive by increasing the number of property transactions through releasing one
home at the top of a chain onto the market. • If enough homes came on the market, prices would fall and young families could afford to move up the housing ladder.16 • And crucial to the entire process is the availability of fairly-‐priced, better-‐designed properties, in the right location with
the right amenities for a more discerning consumer group of downsizers.
For further information please contact: Liz Emerson, [email protected], mobile: 07971 228823
1 IF (2014); http://www.if.org.uk/archives/5393/housing-‐crisis-‐what-‐housing-‐crisis 2 Youth & Policy (2012); http://www.youthandpolicy.org/wp-‐content/uploads/2013/07/melrose-‐yandp108.pdf 3 IF (2014); http://www.if.org.uk/wp-‐content/uploads/2014/08/IF_Index2014_Final_14.pdf 4 Hailfax (2013); http://www.lloydsbankinggroup.com/globalassets/documents/media/press-‐releases/halifax/2013/1706_halifax_generation_report.pdf 5 Department of Communities and Local Government, 2014. 6 IF (2011) http://www.if.org.uk/wp-‐content/uploads/2011/10/IF_Housing_Defin_Report_19oct.pdf 7 Legal and General (2015) http://www.legalandgeneralgroup.com/_pdfs/press-‐release/LTB_Front_Cover_Report_Final.pdf 8 ibid. 9 IF (2014); http://www.if.org.uk/wp-‐content/uploads/2014/10/Empty_Bedrooms_Undermine_New_Building_FINAL.pdf 10 ‘Winter Fuel Payment For Those Over 62’; http://www.rightstobenefits.com/seniors/winter_fuel_payments.htm 11 Stamp Duty (2015); http://www.stampdutyrates.co.uk/ 12 Lydia Blackwell, Financial Conduct Authority (2015); http://www.dailymail.co.uk/news/article-‐3239243/Anger-‐financial-‐watchdog-‐tells-‐elderly-‐downsize-‐tackle-‐housing-‐shortage.html 13 Legal and General (2015); http://www.legalandgeneralgroup.com/_pdfs/press-‐release/LTB_Front_Cover_Report_Final.pdf 14 RICS (2015); http://www.rics.org/uk/about-‐rics/what-‐we-‐do/influencing-‐policy/policy-‐positions/rics-‐residential-‐policy/ 15 Ashley Seager in The Sunday Times Money Section (October 4th, 2015) 16 ibid.
