Variety and volume: the key ingredients for an aging population

The struggle to provide more accommodation for older people is, sadly, one with which we are all familiar. As a nation we simply build too few homes for our aging population. 

For instance, in 2016 there are 3,000 fewer care home beds than last year, despite 6,000 new bed spaces being provided, and that’s just one tenure. Other countries – such as the USA, Australia and New Zealand – are way ahead of us in providing more housing and more choice for the older generation.

Recent research by Savills shows that in 2014 around 84,000 households downsized, selling property worth £40 billion to release equity of roughly £13 billion. By 2019, this will rise to 109,000 downsizers selling property worth about £62 billion and releasing approximately £20 billion in equity.

This jump of a third is fuelled, in part, by an increase in the number of baby boomers selling their homes to help their children. It is not so likely to be the case that decisions to downsize are driven by poor health. Many downsizers will be fit, active and affluent. So where will they choose to live?

The tried-and-tested models in an under-developed market may seem attractive to investors, but in pressing for there to be more – much more – housing available for older people, we need there to be a wide range of different options offering genuine choices for those both well off and less well off, and for those with care needs and those without.

Increasingly, younger downsizers are expected to favour flats, which have all the lateral space benefits of a bungalow but with the added security of being able to lock up and leave when travelling. Downsizers have a lifetime of possessions so storage will be key, as will space to accommodate visiting family members. 

In addition, these buyers are not only motivated by the traditional retirement offer of safety and security. They are also interested in a future-proof move, such as to a development where additional services/care packages might be available in the longer term, but only if they are not overtly part of the offering. Yet, currently fewer than 0.5 per cent of older people in the UK live in retirement communities, compared with 10 times as many elsewhere.

At the recent packed inaugural Associated Retirement Community Operators conference in London, I was intrigued to listen to Dr Margaret Wylde, founder and CEO of Promatura Group, a US research company that advises its clients on what to build and who is likely to buy from them.

Dr Wylde warned of what happens when the retirement community market becomes overheated, and when there is wide choice. Customers, of course, become more discerning when able to specify a neighbourhood, a tenure type and a managing agent, and the end result was some developments failing to remain attractive propositions.

It took me back to a conversation I once had in Perth, Western Australia, when I asked a retirement village operator where his residents might be living if not with him. His answer was: 'Either in the one over that hill or in the village a few streets the other way. We have to continually upgrade and improve the offer to stay competitive.'

Dr Wylde pointed out that too much of what had been developed in the US simply imitated what was already there rather than providing genuine niche choices for discerning customers.

Her message (to an audience where most were struggling to envisage the UK ever having anything like enough of this sort of housing, never mind too much) was clear: there is no one ideal solution to suit all older people.

The shortage of accommodation for older people in this country makes it all the more important that variety, as well as volume, are our watchwords.

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