Some solutions to the housing crisis have been centered around process. However, this report from the UK discussed in this Phys.org article, shows that solutions may need to break down the demographics and provide solutions based on their housing needs.
Housing policy is too concentrated on first-time buyers and should be refocused towards 'last-time buyers' to encourage those aged 55+ to downsize, according to a new report for the Centre for the Study of Financial Innovation (CSFI).
The report, by Professor Les Mayhew, of Cass Business School, also highlights the role of the financial services industry in expanding mortgage offerings and insurance policies to enable older people to monetise their housing wealth. This would not only help them fund retirement but also cover the rising cost of care.
The UK's housing crisis is the result of a growing population and an inadequate supply of new homes. Demographic analysis suggests that the demand for accommodation could add the equivalent of two new towns, each with 100,000 homes, every year for 25 years.
The trend has been fed by shrinking household size, linked to the ageing population. If there were still 2.48 people per dwelling, as in 1980, rather than today's 2.36, the UK would have 1.3m more homes available, according to the report supported by Cass and Aldermore, the challenger bank.
But this is not just a numbers game. Professor Mayhew finds that, on paper at least, the UK is not short of housing; rather, it is short of the right sort of housing. Too many older people are stuck in houses that no longer suit them with a lack of affordable alternatives of suitable quality and size.
The evidence suggests that the government should refocus policy on 'last-time buyers' to encourage downsizing, including via the planning system and tax incentives. A more efficient approach could reduce the requirement for new homes by up to quarter each year.
