The City regulator has said it is not its policy to encourage older people to sell up and move home, after a member of its mortgages team told a conference that the UK had a “real issue with the last-time buyer”.
In comments reported by the Daily Mail, Lynda Blackwell from the Financial Conduct Authority suggested that the government’s focus on first-time buyers might be misplaced.
“We’ve got a big supply issue in this country,” she said. “There’s lots of questions about whether it is right that the government should focus on the first-time buyer when we’ve got a real issue with the last-time buyer.
“There’s older borrowers who basically pay off their mortgage and sit quite happily in a very big house.”
The comments, which were made during a panel discussion on the UK”s housing shortage, provoked a strong reaction from Saga, which described them as “unhelpful and insulting”.
A spokesman for the FCA: “These comments, which were made as part of a panel discussion at a trade body event, do not represent FCA policy.
“Last week we published a range of materials as part of a conference on the mortgage market organised by the FCA. That conference covered a wide range of issues concerning the mortgage market including older homeowners.”
Paul Green, director of communications for the group which represents older people’s interests, said: “If people have saved and paid for their house over their working lives, it’s down to them if they want to fill it with family or live on their own, but setting the generations against each other or talking about ‘tackling older homeowners’ is not just unhelpful it’s insulting.”
However, he acknowledged that looking across the market might help first-time buyers.
“First time buyer schemes for the young are a good start, but we need to consider incentives to help encourage those that would like to move, to take that step,” he said.
“The FCA are right, we definitely need to do more and do it better, but using divisive language will only alienate the very people we need to help and encourage.”
While the shortage of new homes is at the heart of the affordability crisis which is pricing out first-time buyers and families in some parts of the country, the lack of existing properties coming on to the market is also a problem.
Recent figures from the Royal Institution of Chartered Surveyors have shown the number of homes for sale at a record low, against a rise in the number of interested buyers.
At a hearing on the London rental market, Christine Whitehead, professor of housing at the London School of Economics, said longevity was one of the key problems in the capital’s housing market.
“We are now housing four generations rather than three and we have not addressed that right across the board,” she said. “The result is that those who have to get into the market are being excluded by people like me who live too long.”
The Council of Mortgage Lenders’ chief economist Bob Pannell has written about the role of managing housing stock in easing the housing crisis, saying that the UK had “an ageing population that holds a disproportionately large amount of national housing assets”.
Figures show that older people are more likely to under-occupy housing, but Pannell said they were also often “reluctant or unable to move to homes that might better suit their needs.”
He added that promoting more activity across the market as a whole may help to encourage both more efficient use of existing housing and the marketability of new homes.
A spokeswoman for the CML said: “No one is suggesting that anyone should be forced to do anything they don’t want to do, however there may be ways to remove the barriers that people who wish to move face.”
She said some homeowners who would otherwise consider moving had found that after stamp duty and other costs they would end up out of pocket.
Saga said its research had found that two-thirds of older homeowners would consider moving home for retirement but were prevented from doing so by the lack of appropriate properties or the cost.
It has suggested the government allow one stamp-duty free move for these people, which could be balanced by an estimated £461m in tax generated on sales which would otherwise not have taken place.
