Retirement Housing and the National Care Service

At a fireside chat hosted by Real Estate Partner Sarah Walker at Bisnow's UK Later Living Summit last week, Paul Teverson, Chair of the Retirement Housing Group (the "RHG"), discussed how he sees three separate but essential priorities for the delivery of retirement housing units: the right Government policy; good consumer confidence; and the right product. In his view,  the retirement housing sector will only substantially grow when those three elements are in place:

• In terms of government policy, the Commonhold and Leasehold Reform Bill is expected to be enacted this Autumn. As the details of how the private sector will complement a National Care Service are yet to be brought forward, it is early days to be able to make any firm predictions, but it is clear that Government is serious about both supporting older people's care and building more housing.
  
  
• In terms of market confidence, the proposed move to commonhold has presented the sector with a chance to redefine its offering and improve consumer confidence, something that the RHG has led from the front with a proposed Commonhold for Retirement Living.
  
  
• As to product type, tenure reform has been front and centre of many retirement housing operators' strategic discussions this year with the advantages of rental being a key focus. Rental offers an easier route to moving into a retirement housing development for the consumer, without needing to sell an existing home (rent-to-rent can be explored for example). For the operator, little changes from an operational perspective. Exactly which facilities are provided needs to be carefully considered against the projected return on capital invested, but this is consistent with a sector-wide push to reconsider the design, size and location of schemes  aligned with changing consumer demand. From an investor perspective, senior rental can look very similar to existing BTR strategies, providing a way to access institutional capital that has, to date, been hard for the sector to make work. 

In 2024, the Older People's Housing Taskforce published its final report, Our Future Homes, outlining 10 core recommendations to address the severe shortage of specialist later living accommodation in the UK. The time is right for support at the highest levels for the implementation of these recommendations and for investors to follow suit by investing into this important sector as part of their wider living strategies.

For a nation whose population of over-65s  will surpass 20% in 2030, the scale of the opportunity is clear but not without its challenges. The retirement housing sector does not exist in a vacuum as regards the wider housing market. A policy approach which supports a viable development environment, and which supports both first-time buyers and last time movers, is fundamental to solving our housing woes. As to care, retirement housing plays an essential role in keeping older people healthier for longer, reducing loneliness and providing suitable housing for the provision of care services (whether privately or publicly funded).

The retirement sector has excellent and well-established operators and a clear demographic case. It is over to the Government to see if they can play their part by establishing the right policy environment.

Sarah Walker is a partner at Travers Smith and an officer of the RHG. She has led on the RHG proposals for Commonhold for Retirement Living and is involved in several senior housing projects with the International Longevity Centre, of which she is also a trustee.