If you were to ask me if retirement living in the UK has an image problem, I would say absolutely not. You might then ask why the UK market currently lags behind the uptake in places like the US, Australia, and New Zealand? For me, the answer is simple. It’s the shortfall in our supply.
Housing with care schemes in Australia, New Zealand and the United States have a penetration rate of 5%, 5.5% and 6% respectively[i]. According to Knight Frank’s Senior Living Index[ii] there are just 80,696 housing with care properties in the UK. When this is compared to the population of over 65s across the UK, 12.5 million[iii], this gives a penetration rate of less than 1%.
We recently carried out some research[iv] to look at people’s desire to downsize, the motivations and the barriers. And the message was clear. The single greatest incentive that would support over 55s to downsize is to help them find the right property. Over a fifth (22%) of over 55s said this would be the greatest incentive, more than those that said financial incentives like stamp duty relief or a one-off cash injection.
What this tells me is that for the people who do want to move, and there are plenty of them, we don’t yet have the choice available to provide the options they are want. We need to increase supply to give people choice over the type of property, location, price, type of tenure and the level of support they want.
What’s encouraging is that the market is on the cusp of a significant change. Savill’s recently described the retirement living market as being at an inflection point which will add more momentum to the delivery of specialist retirement communities.
Increasing supply will in turn, increase choice and give people the options they are looking for, which will ultimately lead to a shift in the number of people living in and experiencing what life is like living in a retirement community. And word of mouth is perhaps the most powerful tool we have at our disposal when increasing the positive sentiment around this type of living.
While this is a significant part of the puzzle, there are other pieces to slot in looking at retirement living becoming more mainstream.
The first is to promote the benefits of this type of living more widely. Over the last few years, we’ve been focussed on how we make our Audley and Mayfield Villages not just somewhere people can live, with the care available as they need, but somewhere people can actively improve their health and wellbeing. Supporting people to live well and stay well for longer, live independent lives and reduce aspects like the length of a hospital stay, after an operation for instance.
And, then the final piece of the puzzle and where government support can play a part, is in the financial incentives to encourage people to move into properties that are suitable for their changing needs, But, crucially, this has to come when there has been an uptick in supply. It’s little good throwing incentives at people if they have limited choice of where to move to. A fifth (20%) of over 55s think there should be a stamp duty exemption for downsizers, and the same proportion think there should be a one-off financial gift.
If we are to make retirement living a more integrated part of the housing mix, and encourage people to move before they need care, then there must be a focus on three things; increasing supply and doing so urgently, promoting of the benefits of the model and this should all be supported by financial incentives, but only when the time is right.
[i] Knight Frank Senior Living Index 2020 – https://content.knightfrank.com/research/1854/documents/en/senior-living-annual-performance-review-2020-7615.pdf
Ii Knight Frank Senior Living Index 2021 – https://content.knightfrank.com/research/1854/documents/en/seniors-housing-annual-performance-review-2021-8481.pdf
[iii] ONS population – MYE2 tables
[iv] Results based on research undertaken by Opinium between 11th March 2022 and 17th March 2022 among 2,005 UK adults with 1,033 people aged 55+.
