Older people are facing a shortage of suitable housing for their retirement, putting pressure on the wider property market, according to fresh data from Knight Frank.
A new report which provides in depth insight into the supply of retirement housing in Britain shows that developers and housebuilders, and to a certain extent buy-to-let landlords, have failed to tap into the opportunities created by an ageing population and there remains a lack of appropriate homes being constructed in the retirement housing sector.
Knight Frank report that around 5,500 new retirement housing units are expected to complete in the UK this year, representing around 3% of the total number of homes to be built, and yet about 7.8 million people, or approximately 18% of the UK’s population, are over the age of 65.
Some 715,000 homes in the UK are currently classified as ‘retirement housing’, ranging from age-restricted developments to close care housing, which accounts for around 2.6% of total housing stock and is dominated largely by older stock in the affordable housing sector. Private retirement housing accounts for only 0.6% of all dwellings in the UK.
Emma Cleugh, head of institutional consultancy at Knight Frank, said that while not all older people would choose to move from their existing homes as they age, a significant proportion would like to move into purpose-built accommodation.
According to Knight Frank, around 25% of over-55s – or around two million people – would consider moving into retirement housing in the future, a pool of potential demand that is driving interest in the sector.
“Increasing the provision of housing suitable for older people will have direct benefits across the whole housing market, for all generations,” said Emma Cleugh, head of institutional consultancy at Knight Frank.
Cleugh reports that there is “significant appetite” in the market to develop and invest in the retirement housing sector and provide specialist and “aspirational housing” that the older generation now demands.
She continued: “Now that the resolution of the OFT and Law Commission investigations into event fees in the retirement housing sector looks to be on the cards, we anticipate significantly increased levels of activity across the sector. However, it remains to be seen whether the scale of investment will begin to re-balance the current mismatch between supply and the pool of demand in this market.”
A recent survey from the National Landlords Association (NLA) showed that that there has been a significant increase in the number of people living in private rented accommodation in retirement across much of the UK since 2012.
The research found that the number of retired private renters has increased by more than 200,000, or 13%, in the last four years, reflecting the fact that more people are turning to the private rented sector to provide suitable accommodation.
But the findings from the research indicated that it may soon become harder for those approaching retirement to find suitable rented accommodation in the future due to the general supply-demand imbalance in the market, according to Carolyn Uphill, chairman of the NLA.
She said: “More and more people are turning to private rented housing at every stage of their lives, including in retirement.
“Landlords appreciate the stability and assurances often provided by older households, but are finding it increasingly difficult to build businesses around the needs of potentially vulnerable tenants.”
A separate report published by Age UK last week also acknowledged that the volume of older people living in the private rented sector is expected to rise sharply over the next few years, but added that many ‘vulnerable’ older people are being forced to live in ‘awful privately rented accommodation’.
Caroline Abrahams, charity director of Age UK, said: “Calls to our advice line show that some highly vulnerable older people are enduring grim living conditions in the private rented sector and this is truly shocking.
“No one should have to put up with such squalor at any age, but the idea that a chronically ill older person could be living on their own for weeks or even months with no proper heating, or cooking facilities or hot water is sickening.”