A new report suggests that shared ownership might help people move into housing that better suits their needs when they get older.
The latest HAPPI report (Housing our Ageing Population: Panel for Innovation) asks whether shared ownership could be the game-changer for ‘rightsizing’.
It concludes that this option can overcome the serious affordability barrier that prevents so many people in the ‘squeezed middle’ from moving into a retirement or extra-care apartment. But it needs some changes.
Over 75% of pensioners own their own home (more than 5.5 million properties). They have some equity even if they have few other resources.
For many, the home is, or may become, unsuitable for later life: steps and stairs, inaccessible bathrooms, ineffective/ expensive heating, unmanageable garden, often compounded by isolation and loneliness.
The problem is that the value of the home to be sold will often be less than the cost of a retirement/ extra-care apartment. Shared ownership can bridge the gap.
“A clear regulatory framework would give greater confidence to investors as well as to potential buyers”
Housing benefit can cover the rent for those with little or no other resources. And under the government’s Older People’s Shared Ownership (OPSO) scheme, no rent is charged for those buying a 75% share.
However, despite its potential, shared ownership for older people is not a perfect answer. First, there are hazards for buyers in terms of the complexity and transparency of some of their leases, fees and charges.
Our report calls for greater transparency and clarity, with proper regulation to protect the consumer. A clear regulatory framework would give greater confidence to investors as well as to potential buyers.
Second, the grant arrangements through Homes England and the Greater London Authority contain anomalies in their current format. It seems odd, for example, that those purchasing a 75% stake in their property pay no rent, while those looking for a 70% stake are left to pay rent on the whole of the remaining 30%.
Some simplification and rearrangement of the OPSO model is needed both to ensure fairness for buyers and to attract more registered providers to develop shared ownership schemes. We advocate the grant system should enable a simple 25% rental discount for all OPSO shared owners.
The SO-HAPPI report, written by the Smith Institute and sponsored by Housing 21, can be found on either the Housing LIN’s or Housing 21’s websites. It has 24 recommendations, which add up to an important gift to the government’s eagerly-awaited Older People’s Housing Taskforce.
Speaking at the report’s launch, housing minister Lucy Frazer apologised that the Taskforce – first announced in May 2021 – has taken time to get started, but she noted that it is on its way. The SO-HAPPI report should be an invaluable contribution to its deliberations.
If we want tens of thousands more older homeowners to have the chance to rightsize, then shared ownership, with modifications, could be a big answer.
Article written by Lord Best, chair, Affordable Housing Commission, and published on www.insidehousing.co.uk