Why Diversity Has to Rule in our Comfortably Numb Retirement Housing Sector

12.10.16

Downsizing is easier said than done especially during one’s golden years. Saying goodbye to the cherished family home can be a major wrench. But it’s made even harder in the UK by the lack of housing being built for retirees to move into. By 2025, 20% of the UK population will be over 65 (14.3 million people), with over 65s owning a combined £800 billion of housing equity.

But while many retirees may wish to enjoy their twilight years in retirement housing, the reality is, there’s a chronic under-supply of high quality Housing with Care in the right locations. Recent mid to high end schemes being developed across the UK are being fully sold off-plan, with lengthy waiting lists for existing schemes. In the UK, the vast majority of over 65s currently live in the mainstream housing market. Only 0.6% of retirees live in Housing with Care, which is ten times less than in more mature retirement housing markets such as the USA and Australia, where over 5%  of over 65s live in Housing with Care. The latest industry research indicates that almost 80% of the over 65 population would be classified as being within mid and high end affluence by 2025, whilst 75% of the current Housing with Care stock is classified as affordable, highlighting the chronic supply-demand imbalance in the current market.

Why the comfortably numb chasm? Why the lack of appropriate development based on market demand? It’s not as if third age demographics have crept up unannounced. Research clearly indicates that a large percentage of the over 60s aspire to be “last-time buyers”. Buying somewhere specifically designed for retirement is a priority. It makes sense for them – for wider society – for all sorts of reasons.

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.

It also reduces demand on public sector resources – residents of owner-occupied warden assisted retirement housing for example, are likely to spend fewer nights in hospital/funded placement care homes.

The burning question of course, is what can be done to create more of this kind of housing? Isn’t it time to fully embrace development diversity with a facilitative government championing the process?

A few quick step changes could assist with this. First - retirement housing should be given special planning status. Secondly - stamp duty should be reduced for downsizers. What isn’t needed is a further layer or three of complex subsidies, exemptions and regulations added to bureaucracy mountain currently distorting the UK property market.

Abode2 welcomes your thoughts.

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