Building the next generation of retirement accommodation
Our recent report Housing Futures: The Platinum Generation, produced with property experts Strutt and Parker, explored the needs and desires of the Baby Boomers. This generation is just hitting retirement age, and over the next 20 years will represent a significant ‘bump’ in retirees. By 2034 it is predicted that the over 65s will make up almost a quarter of the UK population*. But this generation, who we’re calling the Platinum Generation, is an interesting demographic, and not just because of their numbers. Along with the moniker ‘Baby Boomer’ they are also known as the ‘Golden Generation’; who grew up with better nutrition, the NHS, and came of age with high employment levels. For this reason, a significant proportion of the Platinum Generation owns property outright, has pensions and investments, and most significantly is in good health. It is also for this reason that the type of retirement accommodation and lifestyle their parents enjoyed, is not for them.
They would like to downsize, but what to do?
The Platinum Generation has high expectations for retirement living. Many people within this generation are fit and active, and expect to enjoy a high-quality lifestyle for many years to come. Increased longevity and healthier lifestyles also mean that these retirees will not need specialist care until they are much older than previous generations. However, many are living in their primary / family homes that are no longer suitable for their way of life. They want to reduce their overheads for the repair and maintenance of their properties, energy bills are challenging - especially for those living in large houses - and many people would like to free up some capital to spend on their children or on themselves during retirement. It is calculated that the over 65s own a combined £1.031 trillion of housing equity! Age Concern believes that 25% of over 65s would like to downsize into more appropriate retirement housing, but the right properties are in short supply. We think this is an exciting opportunity for investors, developers and operators. With a booming market (no pun intended), we’re already involved in building a new generation of retirement accommodation that meets the high expectations of the Platinum Generation. So, what do they want and where will these new homes be built?
Platinum places for a new retirement generation
Our report with Strutt and Parker was the result of surveying 2,200 respondents aged 65+, across the UK, about their retirement plans and desires. While many agreed that they need to plan for their care and support in later life, only 27% had made provisions for their accommodation and care. We discovered that the most significant barriers to downsizing into retirement accommodation are:
- Lack of aspirational retirement properties in the UK to downsize into,
- Retirement housing perceived to not be affordable in the UK,
- Lack of retirement housing in their area (location analysis of care homes shows that 31% of residents come from over 10 miles away),
- The location of retirement housing is often away from local amenities leading to isolation and segregation (children today have a 5% chance of someone 65-plus living in their area, compared with 15% in 1991).
As well as exploring our respondents’ views on the current provision of retirement accommodation in the UK, we also wanted to know exactly what they wanted. As anticipated they had high expectations for the type of accommodation – generous rooms, outside space, 24-hour security, and onsite facilities such as swimming pools, gyms and restaurants, amongst other ‘must haves’. It was also clear that location was very important. They don’t want to live in isolated retirement ‘ghettos’ away from local amenities, cultural venues, transport links, and friends and family. Instead they want to be in the heart of their community, close to town or village centres with easy access to everything the locality has on offer. This presents a challenge for developers, planners and operators alike – where to site this new generation of retirement housing? With high demand for premium sites it’s not an insignificant challenge; but recent legislation including the 2014 Care Act and 2017 Neighbourhood Planning Act puts more onus on local authorities to make provision for retirement housing. In our experience the most appropriate sites are surplus properties or land, brownfield sites or form part of a new multiuse development.
Surplus properties and land
With many buildings lying empty, both in public and private ownership, it is a logical step to build new retirement developments on this land. Examples of the type of site that makes an excellent location for retirement accommodation include: disused office buildings, pubs, surplus car parks, police and fire stations, private sports grounds, and even care homes.
While brownfield sites have inherited challenges such as contamination, the investment opportunity presented by developing retirement housing on these sites surmounts many of the obstacles to development. Local authorities are also supportive of efforts to bring brownfield sites back into use; revitalising often rundown areas and reducing planning pressures on more sensitive greenfield sites.
The Platinum Generation’s desire to be part of the local community, and to not be isolated and living in retirement ‘ghettos’, the opportunity to provide some small-scale schemes within multiuse developments. The provision of retirement housing within other developments will, in many cases, assume some of the responsibilities of the local authority to meet housing need for older people in their areas. Octopus Healthcare is working in partnership with landowners, developers, local authorities and operators to identify suitable sites and invest in the booming retirement market.
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]