In a move Richard Carr is sure will anger the silver set, the Royal Institution of Chartered Surveyors (RICS) has said that older home owners should downsize to end the UK’s housing crisis.
A recent BBC Inside Out investigation made it pretty clear that England isn’t building enough houses. We managed to construct 457,490 residential properties from 2011 – 2014. Great – but the National Housing Federation predicted we’d need to build 974,000 to fill the gap.
Yet despite the incredibly obvious lack of supply, demand for UK residential property has hit record levels. Older buyers, those aged 55 and over, are certainly contributing to the problem. A recent Prudential study found that over a third of home owners in this age bracket plan to buy one more property in their lifetimes. One in seven admitted that they were inspired to do so by recent pension reforms, which allow them to remove their defined contribution pensions as a lump sum.
The head of mortgages at the Financial Conduct Authority suggested last week that older people should leave family homes to make way for younger families, to solve the UK’s housing crisis. The suggestion was roundly criticised, but RICS has now decided to back it themselves in their latest policy review, arguing that if older people downsized, it’d free-up three million residential properties.
Yet the Institution also insisted that the expansion of affordable ownership through planning controls would address the issue, as long as developers offered a percentage of new homes for affordable rent. They further argued that the implementation of regulations which would oblige second home owners to rent out their properties, and the creation of Self Invested Personal Pensions which would allow people to invest in Build-to-Let schemes, would help end the housing crisis.
Selling the suggestion
But Jeremy Blackburn, head of policy at RICS was quick to say that downsizing is the most effective solution. He was quoted by Property Wire commenting: “Britain’s older home owners are understandably reluctant to move out of much loved, but often under occupied family homes.”
He added: “Clearly, it’s an emotive issue and one that needs to be treated with sensitivity, but we would like to see central and local government provide older people with the information, practical and financial support they need to downsize if that is their choice.”
Stopping the crisis
If RICS thinks that older home owners are actually going to go for this, they’re clearly deluded. An Office for National Statistics survey of 20,000 people showed that 20% now say property is key to developing the largest possible pension fund; 10% more than 2010. No, instead Richard Carr believes that we need to meet the needs of residential property developers and reform the UK’s current planning processes to boost our supply of houses and put an end to this crisis.