Does housing wealth really have untapped potential to fund care and support options for older people? Recently Age UK held a policy seminar on housing inequality among older people to consider this and a number of other related questions, with the help of some leading experts. The conclusions they drew seem to challenge a number of faulty assumptions about housing wealth – assumptions that are shaping the thinking of policy makers. Dr Beverly Searle of St. Andrew’s University offered an alternative and more complex picture of the distribution of housing prosperity in England and the implications for policy.
Dr Searle described dramatic geographical variations in the location of housing wealth – linked to house prices – which determine the equity available to older people and the choices they can make. Dr Searle found that 42% of housing wealth is concentrated in London and the South East, while 20% is located in the North East, Yorkshire and Humberside and the North West combined. Only 3% of housing wealth is found in North East. These inequalities mean that some housing and care options will only be available in affluent places, while choices for older people in poorer areas decline.
Despite stark housing inequalities within the older population we have seen a series of studies that try to represent the issue of housing wealth as a battle between generations. This serves to shift the focus away from inadequate housing policies and broader patterns of inequality that affect all of us. They give the impression that older owners in London and the South East are typical of all older householders, as the rest of England seems to fade into the background. These studies fail to explore the consequences of housing inequality across the older population. They argue the ‘baby boomer’ generation have gained from rising house prices (although this is the result of successive Governments failing to build enough homes). But they don’t consider that many older owners have not fared so well.
It is estimated that 67% (1.1 m people) of older people living in poverty are owner occupiers. Official figures show 26% of households, containing an older person are non-decent – with the likelihood that a high proportion of these are owners. Previous generations were actively encouraged by politicians and lenders to buy their homes and become part of the ‘property owning democracy’. Many older people who bought under the ‘Right to Buy’ policies during the Eighties gained – although often making financial sacrifices to sustain their mortgage. Others struggle to repair and maintain their homes as their incomes have declined in retirement.
Significant numbers of older owners have very little or negative equity in their homes. Dr Searle’s figures show some with negative equity of -£280,000 while others have equity of £1m or more. While commentators often talk about older people as ‘asset rich and income poor’, Dr Seale’s research shows that in numerous places they are both ‘asset poor and income poor’.
Regional housing inequality has profound implications for the housing options available to older people, based on where they live. At our seminar Karen Croucher, from York University, showed that the ability to downsize or move into retirement housing is unrealistic for large parts of the population. Dr Searle also points out that while the population of over 55s who may want to downsize is increasing – potential buyers between 35-54 are declining. At the same time older people seeking small properties have to compete with younger people trying to get a foot on the housing ladder. She argues that while a possible reduction in house prices (as a consequence of these factors) may be a good thing, it will reduce the equity available to older owners. This scenario implies that policy initiatives, based on an unstable housing market, may be unwise. Those unable to downsize may struggle to afford on-going repairs and adaptations to their home. Disabled older people, unable to improve, heat or adapt their homes, may have little choice but to move into residential care.
The Age UK seminar covered a diverse range of themes on housing inequality and greatly benefited from the involvement of the older people’s forums, who took part in the discussion. Overall, the seminar demonstrated that some of the assumptions made about housing wealth and future incomes among older people are failing to recognise a complex, fragmented and rapidly changing situation. Taking a particular policy approach in one part of the country may be completely inappropriate in another. That is of course assuming the objective is to deliver decent homes and support for the whole older population, regardless of where they live.