The UK will run out of homes for its ageing population if the construction industry cannot provide another 90,000 retirement homes in the next five years, a new report has warned.
According to property firm Savills, the country will need a bare minimum of 11,000 such homes a year just to sustain a projected 2pc annual increase in the number of over-65s. While provision of new homes has averaged just 7,000 a year since 2005, Savills’ analysis suggests current supply trends may meet this requirement soon.
However, meeting the needs of the growing cohort of Britons aged 75 and over will put additional pressure on retirement homes. Set to rise by 3.2pc a year over the next five years, their requirements will mean that the industry must supply some 18,000 homes a year. Neal Hudson, a Savills analyst, said: “Maintaining the existing provision of housing for older people is a minimum benchmark for how much new housing is needed.”
Savills estimates that the country’s over-65s possess more than £1 trillion of mortgage-free housing wealth. Over half of these households – around 3m –live in homes bigger than they require and unsuitable for their changing needs and lifestyle, the firm said.
At present, just 4.8pc of older people in the UK live in retirement housing. In the US, some 17pc of over-60s live in such homes. In Australia, and New Zealand, the proportion is around 13pc.
Increasing the fraction of over-60s’ retirement housing up to a tenth would require the construction of half a million homes over the next five years. As life expectancies continue to rise, the pressure on those in or approaching retirement to care for their own parents is set to grow, too. More than 2m people between the ages of 50 and 65 already provide some unpaid care for those struggling with poor health.READ ALSO – Duke University Receives $25 Million Gift to Support New Arts Building
Providing better retirement home stock will be key to alleviating the pressure on these care-givers as demographic trends worsen. Encouraging more of the elderly to move into retirement homes will require that more attractive stock is produced, better suiting the active social lives of residents, rather than just an “offputting” focus on safety and security.
Unless the right kind of homes can be built, Savills said that most people would seek to stay in the family home until forced to move by a bereavement, a concern for safety, or a health scare.
A much broader focus on providing homes to meet the needs of affluent older movers would not only open up opportunities for developers and investors, but trigger the release of equity – often to help younger family members onto or up the housing ladder – and larger family homes back into the market,” Mr Hudson said.
“Developers and operators need to offer products and services that make it desirable for older people to move,” said Henry Lumby, head of Savills’ retirement living team. “It is relatively easy to create a model for the delivery of premium homes for those with high levels of equity, but developers need to build homes across a spectrum of prices and affordability.