Ben Page on housing complexities and the significance of
emotional connection
Is the provision of appropriate accommodation and infrastructure keeping up with the UK’s changing demography and ageing population?
No, it’s not. One of the dynamics that I think is quite unique in this space and the reason for the mismatch [between demand/need and supply/action] is that unlike all other prejudices – racism, sexism, homophobia etc – ageism, in its broadest sense, is basically about confronting our own mortality. We still want to imagine that it’s not going to happen to us one day.
The other issue is how structural things like Stamp Duty affect this dynamic. I don’t think we appreciate the emotional value that people attach to property, both as an investment and as being a physical repository of a life lived. So you’ve got this rational idea that you should probably sell your expensive house, capitalise, and move somewhere more convenient and with the right amenities. But then where do you go? It will be hard to find somewhere nicer and more convenient than your current home. There are certain high-end assisted living flats which are top-spec, and you get shared leisure facilities like a cinema, but you’re looking at very high starting prices and monthly service charges. For most people it’s not realistic. So the big question is, are you going to be able to get somewhere nice and better value, that frees up capital from your existing home and you’re not having to pay a premium for doing so? The answer is probably not.
You’ve then got add on top of that the emotional connection people have to their property and their belongings.
Ben Page
Ben Page is the Chief Executive of Ipsos and spent seven years as a trustee at the Centre for Ageing Better, as well as being a current visiting professor at King’s College London and a fellow of the Academy of Social Sciences. He has directed thousands of surveys examining consumer trends and behaviour.
I don’t think we appreciate the emotional value that people attach to property, both as an investment and as being a physical repository of a life lived.
What incentives would help to improve the picture?
I’ll give you an example about a government project to do with loft insulation. They were looking at how to persuade people to insulate, and incentives such as if you could get together with five neighbours to all insulate then the government would come in and provide funding of 50%, or find a contractor to do it at half the cost. There was basically no take up. What they found cut through was an offer to do a loft clear out service: they’d go in and remove and help sell forgotten things from the loft, then polish up and give back the things that you wanted to keep. At the same time, they’d insulate the loft. That helped deal with the human connection that people have to their things and to their property while taking sound economic steps. Innovation is what’s needed.
On the delivery side, until we have a market that is prioritising this and developers willing to try these new products out, then there won’t be movement. It’s quite likely to need some radical tax incentive to really make substantive change. At the moment, most people are incentivised to hold on to their property rather than pay Stamp Duty on downsizing, particularly given the majority of families aren’t liable to inheritance tax. So, there’s rational reasons in terms of older people’s motivations not to move – even where they have the opportunity to do so.
Are there any issues around where people choose to live before, and as, they begin to get older?
There’s a large lump of people moving through the population, of which I am part, beginning with those born in the 1940s through to the late 60s, which are immediately feeling the effects of this. People tend to retire to nice coastal, green places instead of, say, central London. There is a minor trend around some people downsizing and moving into a small, trendy London apartment, but prices are such that most people aren’t going to do that.
There’s an ONS scenario for 2110 where there will be over a million people who are over a hundred years old. We’re talking about older people of today, but there are wider housing factors here. We’ve not been building enough homes for younger people, tomorrow’s elderly, let alone older people of today.
As we know, the average age of the first-time home buyer is now into the late thirties. At the same time, we’ve seen average mortgage durations rising. That means that many people are going to only become full homeowners once they’re retired, or when they inherit themselves, if they ever do reach that full equity stage.
In this election year, how far has the issue of ageing and the older population come up in terms of polling?
People worry about health. Everybody worries about health and the NHS. A large proportion of health service expenditure is on the last year of life. Now you can argue whether that’s actually sensible because there could be an argument for spending more on the earlier or middling years to ensure better health outcomes later in life.
Housing doesn’t generally cut through as a national issue in the way that the health service or, say, immigration does, which is curious. Partly it’s because of the complexity and the perception of cost. Labour have said that they will tear up planning rules and it will be interesting to see how this plays out. The only time house prices fell in a substantial way was from the late 1800s to the prewar period when vast quantities of housing was built, homes got a bit smaller, and people actually got better off. But you do need those very large volumes to impact on values.
Would you say that more housing generally is more of a priority than older people’s housing specifically?
Arguably it’s a bit of a red herring. The people that are generally more concerned about housing are younger people, again because more older people own their own homes outright already. Yes, there are many less well-off older people who are badly housed and increasing numbers of the over 65s living in rented accommodation – which is going to exacerbate over the years. But, right now, older people generally have more disposable income than younger people, they own their homes, and so in many ways they’re less concerned about the housing ladder.
On the other hand, having a much better offering for older people would enable them to affordably move out of their existing larger homes and free them up for families moving up the ladder. But as I said before, don’t discount that emotional connection. Those spare bedrooms aren’t just empty space – they’re filled with a lifetime of belongings which don’t always easily convert into a retirement flat.
Saffery LLP is a member of Nexia a leading, global network of independent accounting and consulting firms. Please see https://nexia.com/member-firm-disclaimer/ for further details.
Copyright | Legal | Modern Slavery Act Statement | Privacy Policy | Cookie Policy