The government wants a major boost to house building. But what sort of housing do we need? Although the retired population is rising rapidly, policy has focused on first time buyers. Little attention has been given to the ‘last time buyers’ and renters: those who would like to downsize in the later years of life. But inappropriate housing creates problems for individuals, for the health and social services and the housing market. A study by Professor Ken Mayhew for the International Longevity Centre UK examines the issues. He proposes a radical rebalancing of housing policy.
An ageing society
The demographic trends are clear. The 65+ population is set to increase from 11.2 million today to 17.2 million by 2040. It will be much more evenly spread than at present, with older people accounting for 25-30% of the population in many areas. In North Norfolk (the oldest district in England) is has already passed 33%. The vast majority will live in standard housing with as many as 6.2 million living alone – piling growing pressure on geographically-dispersed care services. Most do not need, or want, traditional residential care. They are capable of independent living with modest support for emergencies.
But in reality, older people are living longer and remaining in increasingly under-occupied homes. And if the government’s ambitious plans prove to be beyond the capacity of the building industry, the next generation will struggle to own their own homes, while the social care system will struggle to deliver care to a widely scattered older population. Meanwhile, over 12,000 hospital beds are occupied by people with no immediate medical need, but no appropriate housing or care available. They would be better and happier in good specialist retirement housing. That would reduce the burden on the NHS, delay transfer into residential care homes and free up housing lower down the ladder. It would also take the stress out of later living.
What is retirement housing like now?
Retirement housing has changed since the 1990s. Most is of higher quality and it typically offers independent living, comfortable lifestyles and a range of amenities to both buyers and renters. Increasingly developments are in larger groupings, but they come in many forms – from isolated buildings to whole ‘villages’. Some are in, or close to, urban areas, while others are on greenfield sites. Larger ones can offer a wider range of amenities, and while their focus is on independent living, they normally include 24/7 staffing, and some communal services. About 20% also offer nursing and residential care facilities.
Freeing the housing market
At present, every year, almost as many bedrooms are being lost to under-occupation as are being replenished by new homes. For each new bedroom added to the dedicated retirement stock, two to three are released in mainstream housing. If all older people lived in homes that were appropriate in size for their needs, we would need to build 50,000 fewer new houses. And this could be funded by redeploying the substantial wealth of the 80% of the 65+ population who own their homes outright.
But, at present, only about 7,000 (3%) new build houses a year are retirement homes. The report suggests that there could easily be demand for 50,000 a year, amounting to 25% of new builds. This would displace much more expensive nursing and residential care as people would be healthier and supported in their own homes for longer.
Why do we not have more?
There are many reasons why this sector has been neglected in the UK, by comparison with other countries. They include institutional inertia, out-of-date images of retirement living, and emotional attachment to the family home. And planning rules also disincentivise developers, because sites designated for retirement developments attract infrastructure levies, unlike applications to build new residential or nursing care.
But industry surveys show many people want to downsize but are put off by the lack of suitable alternatives, especially in the areas where they presently live. They are also concerned about the finances, and about security of tenure.
The report makes six recommendations:
1. Build more retirement homes
This would make more efficient use of the overall housing stock and bear down on house prices. A programme to build 50,000 new retirement units a year would result in a much more efficient use of the overall housing stock.
2. Build more integrated retirement communities
Integrated retirement communities (IRCs) can provide care services as well as communal facilities, with management and other staff on site. Only about 15 large IRCs have been built each year since 2010. Experience from countries like Australia or New Zealand suggest there may be a very substantial pent-up demand in all regions.
3. Repurpose high streets
Changes in shopping habits, accelerated by the pandemic, have left many high streets with vacant property. Repurposing town centre buildings to provide integrated retirement housing could contribute to levelling up and local regeneration.
4. Reforms to planning rules
Retirement housing should be on a level playing field with other building developments, but outdated planning designations and infrastructure levies discourage investment in larger retirement developments. Closer working is needed between planning and social care departments to ensure that the need for retirement housing, with access to care, is factored into local authority plans.
5. Tax incentives and grants
Various financial incentives could be applied to encourage downsizing, and home improvements by those who purchase from them. Where downsizing is not an option, older people should be helped to adapt their homes.
6. Financial advice and paying for care
Downsizing in later life is complex. It may entail switching from owner-occupation to renting or leasing – and other complexities linked to moving home and the social care funding rules. Independent financial advice should be available for last-time buyers who want to move into retirement housing or similar accommodation.
Future proofing retirement living is by Professor Les Mayhew, of the International Longevity Centre – UK (ILC-UK) and Bayes Business School, City, University of London.
