BLOG: Lessons on the financing of home improvements
This blog is the latest in a series exploring home improvements for older people in the UK, in collaboration with the Centre for Ageing Better. A disproportionate number of people […]
Published: 8 Jul, 2024

This blog is the latest in a series exploring home improvements for older people in the UK, in collaboration with the Centre for Ageing Better.

A disproportionate number of people over the age of 55 live in non-decent homes. A non-decent home includes the presence of serious hazards, thermal discomfort, disrepair, or outdated facilities. As well as the day-to-day experience of living in poor quality homes, recent work by the Building Research Establishment highlights the substantial cost that this brings to the NHS. People aged 55 and over account for half of NHS expenditure related to poor quality housing, even though one-third of non-decent homes in England are occupied by this age group. Older people are also more likely to live in a home with the most serious problems; for example, nearly 60% of homes in which occupants cannot heat to a comfortable temperature are lived in by someone aged 55 and over.

Data from the English Housing Survey also shows that there are twice as many non-decent properties in the owner-occupied sector (two million homes) than in the privately or socially rented sectors, and over 50% of these non-decent owner-occupied homes are households headed by someone over the age of 55. Whilst, long-term tenure projections indicate that there will be a notable increase in the proportion of people aged 65+ living in the private rented sector, rising from 4% in 2022 to 13.2% in 2040 – and a decline in owner occupation (82% to 77%) and social renting (15% to 11%) for this group – a high-proportion of older people will continue to own their home, and a significant number struggle to maintain a comfortable living environment free from hazards.

It is therefore timely to consider how improvements to these homes might be funded. Recent research from Foundations and the Centre for Ageing Better highlights a range of good practice models for financing home improvements beyond mandatory Disabled Facilities Grants (DFGs; these are means tested grants capped at £30,000 in England). Options include discretionary grants, loans, area renewal, commissioning, and self-funding.

Combining forms of funding

The cases featured in the report brought together multiple forms of financial assistance, for example topping up mandatory DFGs, or an external funding source such as ECO energy measures, together with a discretionary grant or loan to maximise outcomes for residents. This is an important element of a person-centred approach.

Local authority loans

A number of councils used loans to support individuals to fund home improvement – these included different models, such as capital repayment loans, low-interest loans, equity share loans, and a combination of grants and a loan. These may be administered in house or via a relationship with an external financial organisation such as a social enterprise lender. Trust in the process was crucial, and this could be enhanced through the visible involvement of the local authority, by encouraging trusted friends or family of the individual to be involved in discussions, and supporting people to access independent financial advice.

Tailoring to local needs

The Regulatory Reform (Housing Assistance) Order 2002 (RRO) provides powers for local authorities to provide assistance for housing renewal, including adaptations, in line with a Housing Assistance Policy. This provides discretion for local authorities in how the DFG element of the Better Care Fund is used, and can be a vital mechanism for topping-up funding via discretionary grants and loans in order to address issues such as disrepair, energy efficiency, hospital discharge, and preventative services. One advantage is the ability to tailor assistance to the needs of the local community and in so doing target assistance on the most pressing housing inequalities.

Partnerships

Formal and informal partnerships can be a valuable way to increase reach, bring in specialist expertise, and expand the resources available to address housing problems – in the case studies, partnerships included financial advice, advice on works eligible for funding, administering loans, delivery of home improvements, and raising awareness.

Supporting self-funders

Some individuals may have the funding to be able to improve the home, but not know where to start. Some home improvement services can help households navigate the process by providing advice on getting started, signposting to trusted traders, or managing the process. For example, an individual may be eligible for DFG but want to go further in improving the home at the same time; there are cases in which households have been supported to install adaptations in an extension rather than within the existing footprint of the home, part-funding the work themselves to achieve a more positive outcome for the household. However, funding assistance for private renters is generally very limited – secured loans cannot be offered to tenants, and unsecured loans tend to be very expensive due to levels of risk. Work with landlords could be done on an area basis, with contributions to incentivise upgrading of homes, in combination with enhanced regulatory enforcement. These areas are likely to become more important given the tenure trends highlighted above.

If you are interested in finding out more about approaches to financing home improvements, there is a webinar being hosted by the Centre for Ageing Better on 10 July, and you can book a place here.

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