Time for action: what does the future hold for later living accommodation?

Mayfield Watford: Audley Group’s retirement village in Hertfordshire

Property Week’s Adam Branson asks experts due to speak at next month’s Later Living Conference what it will take to improve supply and take-up of retirement accommodation.

Of course, the fact that people are living longer is a good thing, but it does put added pressure on the housing sector. It was for this reason that the previous government assembled the independent OPHT to produce a report on how to increase the supply of housing for older people.

Its report, ‘Our future homes: housing that promotes wellbeing and community for an ageing population’, was published in November and is expected to inform Labour’s housing strategy, which is expected to be published within the next two months.

Discussions about the best way forward for the sector will feature heavily at Property Week’s Later Living Conference taking place on 2 April in London. So, what do some of the speakers think needs to be done?

There has to be a degree of compulsion to make the housing sector increase the supply
Nick Sanderson, Audley Group

The OPHT’s report draws some stark conclusions. For instance, it estimates an estimated 30,000 to 50,000 new later-living homes are required each year to keep pace with demand, but only around 7,000 such homes are currently being built. Moreover, it finds many later-living homes are unaffordable for the majority of over-75s. It also points out that only around 0.6% of people in the UK live in housing with care support – a 10th of the proportion in countries such as the US, Australia and New Zealand, where retirement communities are well established.

Paula Broadbent is managing director of Lovell Later Living and will take part in the debate about government policy and future investment at the Later Living Conference. She says it is vital that developers and policymakers start thinking beyond the current demographic of older people. “If we don’t, then we’ve got a bigger problem ahead of us that must be dealt with,” she says. “Ultimately, as the population gets older, the pressures on housing, health and social care just become even more exaggerated. This isn’t all about just building new homes; it’s about freeing up housing.”

Amending planning policy

Nick Sanderson, chief executive of Audley Group, will also be a panellist on the debate about government policy and future investment. Sanderson sat on the OPHT and says large-volume housebuilders will never voluntarily develop sufficient later-living homes unless they are forced to. As a result, he believes planning policy needs to be amended at both national and local levels to increase site allocation for older people’s housing.

Wimborne: McCarthy Stone’s retirement village in Dorset

“I’m afraid there has to be a degree of compulsion to make the housing sector sit up and listen and increase the supply,” says Sanderson. “It’s got to be through the housing strategy and fed through into planning policy.

“If you think of the number of large-scale regeneration schemes, particularly in London and major cities, but also all around the country, there is no reference whatsoever to the demographic split of the local population. That has to change.”

In theory, the big housebuilders should welcome such a move. “It means the whole project is delivered faster because you’re providing an alternative housing solution that doesn’t compete with your mainstream housing,” says Sanderson. “The whole scheme just gets accelerated and you end up with a much more representative community that is full of young, old and middle-aged people, which is how communities should be anyway,” he says.

Treating us quite differently to any other type of residential would be the ideal scenario
Shane Paull, McCarthy Stone

Shane Paull, chief operating officer at McCarthy Stone, will be speaking about strategies for success in later living at the conference. He believes the OPHT’s recommendation to provide later-living developers with exemptions from Section 106 and affordable housing contributions would be particularly useful for the sector.

“Treating us quite differently to any other type of residential would be the ideal scenario,” he says. “Whether we’ll get there or not, I’m not so sure; but I do think there’ll be positivity around the sector in the housing strategy, which will be a big step forward.”

Paull would also like to see areas identified and zoned for later-living accommodation, to help address the need for them in certain areas.

Incentives to downsize

The taskforce suggests older people could be incentivised to downsize from their homes to a later-living home through a stamp duty tax break. “Stamp duty doesn’t do anything for anybody, particularly if it’s increasing the cost of moving from an underoccupied family house that is desperately needed [by younger occupants],” says Sanderson.

“The consecutive transactions, maybe four or five transactions, all create additional stamp duty. [The problem] is that, in the past, it has been seen to be potentially another giveaway for an older generation who’ve already got lots of housing equity and have done well in the lottery of life, so the reason [it hasn’t happened] is as much political as fiscal.”

Sunningdale Park: Audley’s luxury retirement village in Berkshire

Driving take-up of later-living accommodation is not just about technical changes. It is widely acknowledged that there simply is not enough awareness of what is already out there. Plus, there have been some horror stories in the press about exorbitant service charges, among other problems.

“A lot of the conversation around older people’s housing is quite negative,” says Sanderson. “If you look at any [mainstream media] article on older people’s housing and look at the comments below, you’ll see quite a lot of negativity around the different models.”

Philippa Kellar, managing director at Richmond Villages, who will be speaking at the conference panel debate about ways of accelerating occupancy rates, believes the UK has a lot to learn from other countries.

For example, in New Zealand, the Retirement Villages Act 2003 defines what constitutes retirement living and provides a higher degree of regulation. “You can’t open a retirement village without having gone through the statutory regulator,” says Kellar. “That provides consumer confidence.”

The UK needs to get to a situation in which older people are aware of the later-living options and feel they will be treated fairly.

“I want to get to a point where the customer looks forward to living in their McCarthy Stone or another operator’s retirement unit,” says Paull. “There needs to be that shift in public perception they’ve got in America, New Zealand and Australia. It’s still not a natural choice for people in the UK.”