More than a million people are on the waiting list for housing, but British homes have millions of unused rooms. Too many properties are energy inefficient and expensive to heat. Too many people do not have a home or one that is not suitable for their needs.
These are complex problems that do not have easy solutions.
However, one positive step the Chancellor could take is to remove or reduce stamp duty for older people who want to downsize.
This would also free up housing for younger generations.
Moving is expensive and being forced to pay stamp duty to buy a new retirement home only increases the barriers that keep older people in properties that are no longer suitable.
What the Chancellor could do is remove or reduce stamp duty for older people who want to downsize, writes Sir Nigel Wilson.
Of course, such a change could pose practical difficulties for the Treasury. But they could be overcome if the removal of stamp duty – or its reduction – was limited to those moving into an ‘integrated retirement community’ with self-contained accommodation, community facilities, care and domestic services.
Additionally, there may be a minimum age to qualify.
Some may object that it would be unfair if older people were granted an exemption from stamp duty.
But the dysfunction in our housing market affects everyone.
Such a change would create an additional incentive to improve the quality of the housing stock for all of us.
Sir Nigel Wilson (pictured) is chief executive of the Legal & General group, which manages £1.3 trillion in assets.
When people downsize, they typically free up cash that can be used to support family members, such as grandchildren, and help the next generation climb the real estate ladder.
Making the market perform better at each step of the ladder is essential for everyone. Our housing stock must reflect the changing needs that people have throughout their lives. And to achieve this, we should set bold goals to build more housing for seniors.
We need to build 30,000 energy efficient homes a year in areas where the need is greatest.
We must also encourage people to plan for their later years and incentivize them through the tax system where appropriate.
Freeing people who have worked all their lives from stamp duty if they want to move to a retirement community would be a great start. If we open this door, it will lead to others, and that would encourage more ideas that can deliver even better outcomes for the economy and society.
This would be good for everyone. Reducing stamp duty for those moving house later in life is not an expense but an investment that should pay for itself.
- Sir Nigel Wilson is chief executive of the Legal & General group, which manages £1.3 trillion in assets.