MPs back Help to Move loans for over-60s

Old couple and house

A third of homeowners over 60 would consider downsizing but up to half cannot afford to move to a retirement property locally.

Between 40 and 50% of older homeowners simply "aren't able to afford to downsize in their local area as their family home is not worth as much as new retirement housing," according to research from think tank Demos.

The research forms the basis of a report by a group of MPs now calling on the government to introduce a package of financial support to help the over-60s move into properties more suitable for retirement.

A 'Help to Move' equity loan for over-60s wanting to downsize has been called for by the All Party Parliamentary Group (APPG) on Housing and Care for Older People.

This would "help older homeowners with lower value properties [up to £250,000] 'bridge the gap' between the value of their home and the purchase price of a new retirement property", said the APPG in the report.

The MPs pointed out that such a loan would tackle the issue of many older people not being easily able to "access mainstream mortgage lending, even when they can afford the repayments".

Abolish stamp duty

The group also called for stamp duty to be abolished for over-60s wishing to downsize to homes priced at £250,000 or less. This would reduce buyers' transaction costs, while "leading to a net gain for the Treasury because of the consequent moves in the property market", the MPs said.

The research in the report forecasts that such a move could help free up some 4.3 million family homes, "easing the pressure on the housing market". The APPG added that "guidance guarantee, to be brought in with new pensions freedoms next year, as well as a new duty on local authorities to provide care advice, should be wrapped into a comprehensive package together with housing advice – helping older people make decisions about where and how they live after retirement".

Lord Best, chair of the APPG, said: "More and more people in their 'extended middle age' are thinking about downsizing. This can mean much reduced fuel bills and maintenance costs, perhaps the release of some capital, and can prevent a forced move in later life. But down-sizing is not easy. Our report recommends a Help to Move package of Stamp Duty relief, financial advice and mortgage support – like the Help to Buy assistance for younger purchasers – to generate the demand that will get more high-quality homes built for this age group."

Claudia Wood, chief executive of the think tank Demos, added: "Politicians from all parties are committed to helping first-time buyers get onto the housing ladder, while ignoring the problems at the other end of the market – many older people would like to downsize and are stuck in properties that are hard to manage and heat.

"A lack of suitable properties and the practical and emotional upheaval of moving can't be underestimated – but affordability is also a major barrier for many. The government needs to commit to really helping this group of people, with concrete policies – not just to ensure older people enjoy a better quality of life but also to stimulate the entire housing market by helping more older people move from family-sized homes."