Matt Hare, planning and development partner at Carter Jonas’ Cambridge office, discusses the speculative opportuinities of retirement living.
There are almost 1.1m people aged 65+ in Greater London, a figure set to increase by 30 per cent in the next 10 years.
Yet London has just 65,000 senior housing units, of which 79 per cent are affordable housing and therefore limited to a specific market.
According to projections by the GLA, the older populations in prosperous areas are increasing at an above average rate: in Kensington & Chelsea the number of over 80s will increase by 44 per cent over the next decade.
While there some open market retirement schemes emerging in the Capital, there remains a significant gap between demand and supply.
The need for specialised older people’s accommodation has historically been overlooked at the strategic plan making stage.
Whilst this has contributed to the current national shortfall in provision it has also led to speculative opportunities, making it an attractive sector for developers and funders.
The retirement living sector has long had woefully inadequate investment across both the private and public sectors, and in terms of government policy.
It is clear there is no strong or central policy, particularly in the National Planning Policy Framework, albeit relatively, recent government planning guidance (not policy) acknowledges that the need to provide housing for older people is ‘critical’, an unusually strong and emotive word in the context of the wider corpus of central planning guidance.
Indeed, it is a sector where there is a great need, the UK population is growing, and the proportion of those over the age of 65 has risen from less than 16 per cent in 2011 to 20 per cent by 2021, equating to an additional 1,840,000 people over this age, totalling 11.1m people.
Given the ageing population and a health system that is splitting at the seams, it is probably no surprise that there is an abundance of opportunity in age-appropriate care and housing.
Looking ahead to the next six to 12 months (and even beyond), we expect that development in this sector will remain very resilient.
With the ever-ageing population there will be no let-up in demand, and as such we expect that investors, funders and developers will continue to diversify into the sector as they see it as a stable asset.
In terms of supply, age-appropriate retirement housing is often able to locate in areas where traditional housing developments would be unable to achieve planning permission.
In local authority areas where there is no meaningful planning strategy for the delivery of specialist older people’s housing the provision of such units can weigh compellingly in support of the granting of planning permission, meaning that land that might otherwise be off limits for general housing could be acceptable for specialist accommodation.
What’s more, retirement living developments are often subject to less onerous planning policy requirements and sometimes do not trigger policy requirements for the delivery of affordable housing.
The benefits of providing this growing demographic with suitable, flexible housing in sustainable locations are multiple, not only for older people themselves but for the families who benefit from the increased supply of larger homes.
The English Housing Survey reveals that households led by an older person are much more likely to be under-occupied than those of other age groups. 55 per cent of households led by a 65+ year old had at least two spare bedrooms, compared with 18 per cent of 16-34 year old households and 34 per cent of 35-64 year old households.
However, there remain many barriers to downsizing and incentives are required and the lack of suitable properties is among the main reasons.
Les Mayhew, Professor of Statistics at Cass Business School, argues in ‘Too little, too late? Housing for an ageing population’, that a permanent stamp duty exemption for ‘last time’ buyers would encourage downsizing.
He also states that a more joined-up approach between housing and health departments is required, because evidence increasingly indicates that that retirement housing with easy access to amenities and healthcare reduces hospital admissions and delays transfer to residential and nursing care facilities.
Many over 65s would like to be closer to bustling city centres, and there are many retirement schemes in town and city centres which help to both enliven and enhance the vitality and viability of town centres.
For example, the Audley retirement village in Clapham offers accommodation in a highly sustainable location with good access to public transport, cultural, retail and leisure facilities.
For multiple reasons, later living is increasingly seen as an attractive, socially responsible, more resilient, and less restrictive sector.
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