Banks: Bridging Finance

Lord Desai Excerpts

Monday 20th October 2014 Lords Chamber

[Lord Newby]

I certainly look forward to reading the report. I will be fascinated to see how that right might be translated into reality for a lot of people, but some local authorities are beginning to look imaginatively about how you help people to move. Very often, one of the big problems is just the physical challenges of sorting out the move, switching the bills and so on. Redbridge, for example, and a number of other authorities have started to provide a service to people who wish to downsize, to help them with all those mechanical arrangements which, for some people, prove to be the last straw in stopping them from downsizing.

[Lord Desai (Lab)]

My Lords, does the Minister recall that during the crisis when we changed from rates and the support grant to the community charge, there was a myth that there were many asset-rich but cash-poor people? It proved not to be true. We are again hearing this myth of asset-rich but cash-poor people, but if they are asset-rich, they should not need a mortgage, as they have enough equity in their present house to relocate.

[Lord Newby]

My Lords, that is obviously the case for many people who have been in the same house for a long time. Some people entering retirement who still have a mortgage may require a mortgage if they are moving to a smaller property, but it is almost by definition going to be a smaller mortgage than the one they previously took out, given that there will have been some capital appreciation. One of the key challenges for us is that research shows that almost half of all over-55 households have spare space in the house. If we can facilitate downsizing where people genuinely want to do it, society as the whole will benefit.