- Octopus Real Estate estimates that there could be as many as 2.5 million UK retirees who’d desire retirement properties, as Covid-19 highlights the benefits community living offers
More people in the UK would consider moving to a retirement community as Covid-19 highlights the benefits of community living, according to latest research from Octopus Real Estate, part of Octopus Group, and a leading UK specialist real estate lender and investor.
The report, ‘Unlocking the retirement opportunity in a post-pandemic world’, highlights the gap between current supply and future demand for retirement real estate with Covid-19 causing many people to re-evaluate their living arrangements.
Octopus Real Estate estimates that there could be as many as 2.5 million1 UK retirees who would desire retirement properties. It is estimated that there will be 7.5 million UK residents aged 65 and over by 20692 and at present fewer than 1% of UK retirees live in retirement communities.
The research highlights that there is a real need for operators, developers, and investors to work together to build more retirement communities to meet this demand. It also makes clear that more work needs to be done to educate people on the benefits of retirement community living.
Key findings from the report include:
- Almost two in three (65%) respondents believe that retirement will be the best years of their life
- Over a third (37%) of over 55s shielded in lockdown. Nearly half (47%) of over 55s felt lonely or isolated during the national Covid-19 lockdowns. Almost a third (28%) found home maintenance stressful and just over half (55%) felt they could keep up with the maintenance
- 27.3% of over 65s would definitely or maybe consider moving to a retirement community once they understood what it offers. This number rose to 43% for those aged 55-59
- Only 12% of those who would not consider a retirement community said this was due to not understanding or trusting the fees
Kevin Beirne, Director, Head of Retirement, Octopus Real Estate, commented:
“The global pandemic has been a catalyst for people across the country re-evaluating their living arrangements and retirees are no exception. The national lockdowns have highlighted the benefits that retirement communities offer. We know that, for the majority, retirement communities will not be the answer but to meet the growing demand of those that are interested, more communities need to be built. By doing so it will also free up more family homes and help unlock the UK’s property crisis. The opportunity in the UK for retirement community operators, developers and institutional investors to come together to create more choice for retirees is clear and in so doing we can play our part in helping to build back better.”
Nick Sanderson, Chair, ARCO and CEO, Audley Group, said:
“This important piece of research is perfectly timed as the nation eases out of lockdown and we readjust our lives following a year of living through the pandemic. The real benefits that living in a retirement community brings is the freedom and protection that comes with having your own front door but with the added benefit of being supported by the team of dedicated staff and the community itself.”
Myth busting and education
The research revealed that many people did not understand what a retirement community offered, 79% of respondents had not considered living in a retirement community and one third (33%) of respondents were not able to identify what a retirement community was.
Many respondents were unaware that the lifestyle they desire in retirement is at the very heart of a retirement community. Once they were made aware of what living in a retirement community was like, their perceptions changed, and they said they would consider moving to a retirement village.
Retirees have an appetite to maintain an active and engaged lifestyle during retirement, those surveyed wanted to support their retirement lifestyle with facilities such as restaurants (53%), coffee shops (50%), social areas (45%) as well as activities and clubs such as exercise classes (43%) and swimming (42%).
Kevin Beirne, Director, Head of Retirement, Octopus Real Estate, explained:
“Moving to a retirement village should be an empowering lifestyle decision – it is not about giving into vulnerabilities. The retirement community industry needs to work together to raise awareness and, in doing so, address the current misconceptions about the sector. It’s telling that over a fifth (21%) of respondents believed that a retirement community was similar to a care home – the knowledge gap is huge and needs to be bridged.”
Katherine Rose, Director of Marketing and Sales, Elysian, commented:
“A particularly important finding that the research revealed is the level of respondents, over a fifth, who are still not clear of the difference between a care home and retirement communities. The assets provide very different lifestyles and support very different needs. There is an important role for the sector to educate and we should work together, as an industry, to highlight the benefits and the differences.”
Phil Schmid, Senior Director, CBRE, added:
“What is clear from the research is that the end demand from retirees seeking an alternative to enjoy their retirement and later life is there if we develop attractive communities. Crucially, living in a retirement community can delay the need for more formal care and enable a retiree to realise their dream of enjoying retirement as the best years of their life.”
Top priorities for retirees include feeling safe and secure (49%), an easy to maintain home (42%), close proximity to a town centre/amenities (40%), space for family/friends to spend the night (35%) and technology enabled (25%). And the most important aspect of retirement for homeowners over 55 is freedom to travel (64%), relaxation (61%) and time with family (60%). All of these aspects are on offer at a retirement community. Event fees have long been perceived as a barrier to people moving into retirement communities, however, the research demonstrates that this may not be the issue, 85% of those considering a move to a retirement community said fees (either a lack of understand or trust of them) had not prevented them from moving, while only 12% of those who would not consider a retirement community said this was due to not understanding or trusting the fees.
Investment opportunity and ESG credentials
Retirement communities offer an opportunity for operators, developers, and institutional investors to ‘operate and invest with purpose’ by developing modern quality real estate for the older demographic which is underpinned by environmental, social and governance (ESG) credentials.
Kevin Beirne, Director, Head of Retirement, Octopus Real Estate, continued:
“Although retirement communities are not new, it is still a nascent market, and the research gives an insight into the potential growth that lies ahead. There is an opportunity to create desirable homes that retired people want, and currently there is not sufficient supply to meet this untapped demand. The industry needs to work together to educate to ensure that the asset is better understood.”
Download a copy of the report here – https://octopus-realestate.com/retirement-report/
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Notes to Editors
1According to the Office for National Statistics (ONS) 9.2 million over 65s own homes. Based on our research, we found that 27.3% of 65+ year olds would definitely or maybe be more likely to move to a retirement community after seeing more information on them, resulting in an estimated total of just over 2.5 million people potentially requiring a home in a retirement community.
2 ONS Overview of the population January 2021
For journalists in their professional capacity only. Personal opinions may change and should not be seen as advice or a recommendation. Octopus Real Estate is the trading name of Octopus Investments Ltd (Reg No 03942880), Bridgeco Ltd (Reg No 6629989), Fern Trading Group Ltd (Reg No 6447318), Nino Ltd (Reg No 9015082), Octopus Healthcare Development Ltd (Reg No 03788979), ORE Lending Ltd (Reg No 12908588) and Octopus Co-Lend Ltd (Reg No 8913299), all registered in England & Wales at: 33 Holborn, London, EC1N 2HT, and Octopus Real Estate S.ar.l. (Reg No B189290) registered in Luxembourg at: 412F, Route d’Esch, Grand Duchy of Luxembourg, 2086, Luxembourg. Octopus Investments Ltd and Octopus Co-Lend Ltd are authorised and regulated by the Financial Conduct AuthorityIssued by Octopus Real Estate. Issued April 2021.