It’s time to start planning properly for retirement housing, says Carl Dyer, Partner at Irwin Mitchell LLP.
Our population is ageing. We have 11,600,000 people over 65. By 2030 we’ll have 20,000,000 over 60 (ONS). L&G have just launched a retirement housing vehicle,noting that the over 65s are growing five times faster than the working population (reported in Estates Gazette 4th August 2017). Doubtless they also noted that those who own property have capital and potential spending power far in excess of first-time buyers.
This demographic shift is inexorable, and inevitable. It is also entirely predictable. Barring an inconceivable level of net emigration of retired people, it will continue.Many of the over 65s are living in properties larger than they need (see for example DCLG/ONS English Housing Survey Household Report 2008/9). The children have fled the nest, but their parents have not. Surveys regularly show that up to half the over 65s are considering or actively want to downsize their property (see most recently McCarthy & Stone survey reported in the Daily Telegraph 3rd August 2017). However, specialist retirement housing comprises just 2% of the housing stock (see ‘Retirement Living Explained’ by Churchill Retirement Living, April 2017), despite retirees being 17.8% of the population (ONS).
This is the sort of long-term demographic trend that our planning system ought to be able to plan to accommodate, but it is not.
Retirement housing plans
National law firm Irwin Mitchell reviewed planning policies for retirement housing in all 329 local plans. A frightening 62% of councils had no specific policy for retirement housing, and had made no site allocations for it, preferring instead statements like ‘we will plan to provide accommodation for all our residents, including the elderly and the disabled’. 22% had a policy, but no allocations. 6.7% had some allocations, but no general policy. Less than 10% of councils had both a retirement housing policy and site-specific allocations (source Irwin Mitchell; and reported in Property Week 21st July 2017).
Why is this happening? Several factors seem to be in play. Sadly, housing the elderly just is not perceived as ‘sexy’ or exciting in the way that building homes for first-time buyers is (one Planning Officer, at a pre-application meeting for a care home, reportedly told a Planning Consultant I have regularly worked with: “We want homes for families and schools for their kids, not a lot of old people.”). Some authorities appear to take the view that, if they plan to build more retirement housing, they’ll get more retired people in their district.
But these people are already there, and they will need specialist accommodation as they get older. One planning officer who has contributed to several local plans recently confided that she was aware of county councils opposing district level care home allocations because they feared consequential pressure on their social care budget. This is a pity, because there are many good reasons to plan for the elderly.
Retirement housing is a land-efficient way of accommodating people. Flats or care bedrooms use a lot less space than housing. Every resident who downsizes into retirement accommodation releases a home onto the open market.
Where care is provided, new local jobs are created at a rate of an average of one per resident; so the same land can serve both a housing and an employment function. Most retirees prefer retirement housing built on brownfield sites in towns. This releases pressure for greenfield development — so housing can be provided in a more politically acceptable way. Care provision can reduce hospital bed blocking. People being cared for live longer.
The government is targeting 200,000 new homes a year. At least one Parliamentary report argued we need 300,000 per year (Economic Affairs Committee 16th July 2016). We have not built at that rate since the 1950s. Many first-time buyers are presently all but priced out of the market, which limits the incentive to build for them. By contrast, retirees can afford to downsize, so the financial incentive is there to deliver purpose built retirement housing.
A serious expansion of the retirement housing sector is a key way that we can get the housing we need for everyone, not just the over 65s. But local councils need to start planning for it. Now.