We need to build a lot more retirement housing – but how?

Every time I write about downsizing someone quite rightly points out that it is easier in theory than in practice. Leaving the large lovely houses you have brought your children up in isn't ever easy. But it's made even harder in the UK by the lack of houses being built for older people to move into.

This is a point picked up in the Telegraph this week by Clive Fenton of McCarthy & Stone (the UK's largest housebuilder for older people). He reckons that six out of ten people over 60 would like to be "last-time buyers" they want to downsize and buy somewhere smaller specifically for their retirement. Demos puts the number at about 3.5 million people.

Many of those say they are looking for a specifically designed retirement property. This makes sense for them and for all of us for all sorts of reasons.

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Building new properties for downsizers frees up family housing. It uses up brownfield land retirees tend to want to live in central areas with easy access to services. It helps to sustain high streets, for the same reason. And it "reduces demand on public sector resources" residents of owner-occupied retirement housing "manage better and spend fewer nights in hospital." That matters, given that "for every year that one person delays or avoids moving into publicly funded residential care, the state saves £30,000."

The question then is what can be done to create more of this kind of housing as our population ages and the row about our housing crisis heats up (see my editor's letter in MoneyWeek this week for more on this).

Fenton reckons that retirement housing should be given special planning status, and that stamp duty should be cut for downsizers. We are extremely loath to suggest that any more subsidies, exemptions or regulations are added to the huge pile currently distorting the UK property market.

This is one of those few areas on which I am not entirely sure what I think (and therefore what it is best to campaign for). But I suspect MoneyWeek readers might be able to help out. Note that in the UK a mere 1% of people live in retirement housing. In the US that number is 17% and in Austria it is 13%.

Thoughts, please?