Addressing the issues that are preventing retirees from downsizing
The Platinum Generation (aka the Baby Boomers, the Golden Generation, or the over 65s) are estimated to be sitting on £1.031 trillion of housing equity! Many of them would like to downsize into retirement accommodation and free up some of this equity, but there is a serious shortage of suitable retirement housing to downsize into.
This is having a significant impact on the property market as a whole: limiting the available housing stock, often family-sized homes, and preventing younger generations from moving up the property ladder. No doubt many readers will know of retirees, maybe your parents, living in large 4-5 bedroom houses that are too big for their needs.
The decision to stay in the primary home is not made for selfish reasons. Age Concern estimate that 25% of over 65s would like to downsize but cannot because of a shortage of suitable retirement accommodation. Instead, retirees are often faced with modifying their existing properties by adding age-friendly features to allow them to continue to live comfortably in their homes.
This is not an ideal solution. Large homes are expensive to maintain, energy bills are high and age-friendly features such as stair lifts and other accessibility solutions are not always compatible with mainstream housing. Given the choice, many retirees would like to downsize, reduce their outgoings, and live in accommodation designed to meet their age-related needs.
Our recent report – Housing Futures: The Platinum Generation – produced with property experts Strutt and Parker explored this demographic, their attitudes to retirement living, their needs and desires. We surveyed 2,200 over 65s across the UK for this report and discovered that while 54% of respondents agree they need to plan their care and support in later life, 73% have no plans in place for retirement accommodation or their care provision in later life. Furthermore, 42% of respondents believe there is a lack of suitable properties in the UK to downsize into.
There are two issues that need to be addressed if we want to enable retirees to downsize.
1.The volume of retirement housing being built – this has declined from approximately 30,000 p/a in the 1980s, to 8,000 p/a today. *
2.The lack of aspirational retirement accommodation in the UK.
In recent years there has been a lift in the number of properties being built specifically for the over 55s, as developers and investors have spotted the opportunity the retirement market presents. However, there is still a significant shortage; particularly as demand is set to increase considerably over the next 20 years – by 2034 it is predicated that the over 65s will make up almost a quarter of the UK population.
We need to build more retirement accommodation to meet this demand. But not just any retirement accommodation. The other key factor in why retirees are not downsizing into retirement housing is the lack of aspirational retirement accommodation available.
The Platinum Generation do not want the same retirement lifestyle as their predecessors had. For good reason. They’ve grown up with the NHS, better nutrition, longer life expectancy and increased prosperity. The average 65 year old today expects to live for longer and in better health than their parent’s generation, enjoying an active and rewarding lifestyle.
In many cases traditional retirement housing is not aligned with their needs or lifestyle choices, and this presents a great opportunity to build a new breed of aspirational retirement housing.
From our survey we discovered that the over 65s are looking for smaller properties, accessibility features, security and reduced outgoings, all factors that traditional retirement housing meets. However, they also have much higher expectations for the accommodation, onsite facilities and the retirement lifestyle this will provide them with.
Onsite restaurants and cafes are on the wish list, as are exercise facilities such as a gym or even an onsite swimming pool. Generously sized rooms, a spare room or a guest suite are all important, as is privacy and access to private outside space. With so much equity tied up in their primary homes, as well as pensions and investments, the Platinum Generation is also prepared to pay for this type of retirement living.
All these factors add up to a very exciting opportunity for investors, developers and operators to meet demand for aspirational retirement housing. Schemes such as Liberty Retirement Living are a great example of this. With our partners, Places of People, we have plans to deliver 25 retirement villages and 2,700 units over the next five years. More details about this exciting project can be found here.
All statistics quoted are from the Housing Futures: The Platinum Generation report, produced with property experts Strutt and Parker. If you would like a copy of the report or to request a copy of our whitepaper exploring the future of UK retirement accommodation contact Mark Davis at [email protected].
If you would like a copy of our report Housing Futures: The Platinum Generation, or to request a copy of our forthcoming whitepaper exploring the future of UK retirement accommodation contact Mark Davis at [email protected].
Octopus Property and Octopus Healthcare merged to form Octopus Real Estate.