Britain is not building enough retirement housing to cater for demand from a rapidly ageing population, according to property consultancy Knight Frank.
The Retirement Housing report shows that such housing makes up only 2.8% of all new homes currently under construction in the UK. With the over 65s making up nearly 23% of the national population in the next 20 years, the lack of supply will compound a significant structural shortfall in purpose-built retirement homes.
According to a survey conducted for the report, a quarter of over 55s say they are likely to consider relocating to a retirement village in the future – suggesting that 4.4 million over-55s, from across the UK, would consider buying or renting a purpose-built retirement property. The “retirement homes” examined in the report include all developments designed with older people in mind, some with levels of care provided, but exclude care homes.
Grainne Gilmore, Head of UK Residential Research at Knight Frank, said: “Housing can play a part in helping to mitigate the care burden. Ensuring older people have access to support and the level of care they need as they age can not only enhance living standards, but can cut care bills later in life as fewer acute services are needed. In many cases, living in suitable housing can ensure people stay ‘at home’ for longer, in a sociable and pleasant environment. The UK is far behind some other countries in providing retirement housing.”
At the beginning of the 20th century, those aged 65 or over made up 5% of the population, in 20 years’ time, this proportion of the population will comprise around 18 million, according to the UK’s national statistics office. Across the globe the number of those aged over 60 will nearly triple by 2050, rising to 2.4 billion, up from 894 million in 2010.
Emma Cleugh, Head of Institutional Consultancy, Knight Frank, said: “Policymakers and investors need to wake up to the reality of a rapidly ageing population and the consequences that flow from that. The Government should be urged to support an ageing population with high quality housing, care and a future lifestyle to which they might aspire.”
With a clear undersupply on the horizon, there are signals that the appetite to build elderly housing (units built specifically for older people) may be set to pick up in the years to come. The data from Glenigan, the construction analysts, shows that the number of elderly housing units awaiting planning consent is more than double the number currently being built.
Grainne Gilmore added: “There is no doubt that potential demand for these types of property is large, and is only set to grow. The housing wealth held by older generations is sizeable, and has been boosted by a near trebling in house prices over the last 20 years – downsizing to realise this wealth amid longer retirements is set to gain momentum.”