Trend-spotting for the senior living sector in 2026

The senior housing sector is adept at meeting a diverse range of needs to help residents maintain independent living into later life. However, aligned to pressures in the wider economy and housing market, the sales environment in the sector has been difficult in recent years, particularly as house price inflation has stalled and build costs have risen, impacting margins. From the consumer perspective, retirees are also now subject to higher costs of living, higher taxes, a more challenging housing market, and greater financial dependency from children well into adulthood to help support them with the rising costs of their education, living, childcare and job instability.

Senior housing provides an opportunity for people in later life to downsize, but leaving the family home and investing in a new home can become a barrier both emotionally and financially. The sector's greatest competitor remains the customer's decision to stay in the family home (often to the detriment of their comfort, independence and care needs). Providers must therefore work hard to overcome these obstacles.

Creative solutions to these challenges will be a feature of 2026 as the sector grapples with what type of product customers most want, and what their finances can support. As well as affordable and shared ownership products, rental has a strong role to play in providing an alternative. Although currently renters are likely to be moving into senior housing much later in life (usually 80 onwards) and are more likely to be sole (often female) occupiers, there appears to be more general momentum behind rental. Knight Frank's recently published figures show that in 2025, 23% of renters who visited a senior living site went on to rent a unit on one during the same year, and that 36% of operators are currently targeting more rental models in their schemes.

Operators are also exploring the potential of other solutions such as the ‘rent to rent’ model in which operators manage the renting-out of the family home to allow the customer to move into a rental retirement property, and use part of the rental income from the family home to pay for the rental costs, service charge and any care in their new home.

There are other good reasons for the sector to think beyond a sole 'for-sale' strategy. Figures from the most recent English Housing Survey reports indicate that the number of private renters is forecast to more than double by 2040.  As these younger generations grow older, they are less likely to be homeowners at the point when they decide to move into retirement housing than the current older generations. An important question, for now unanswered, is whether younger generations are saving sufficiently to support renting into retirement.

Senior living schemes generally require more space than mainstream developments, with a higher ratio of resident amenities to let units, meaning that site viability can come under pressure.  This has been exacerbated in recent years with a sharp increase in build costs, delays in planning and higher operational costs such as costs of labour, food, heating and power.  These costs affect returns and have implications for the sale price, on-going service charges and any deferred management (or other) fees.

Across all types of housing, service charges have been under the media spotlight as a source of concern for leaseholders.  This is one of the primary issues which has motivated successive governments to reform leasehold and rejuvenate commonhold tenure with the recent publication of the draft Commonhold and Leasehold Reform Bill.

However, there has been much misreporting as to what service charges are. Service charges are generally not profit-making and represent the reimbursement to the operator of the cost they incur in providing the required amenities at the development. Rising costs of living have led to higher service charges within the sector (as well as in mainstream housing with shared services). Senior living operators can leverage their scale and expertise to help keep cost increases to a minimum, and in some cases might offer residents the option to defer payment of some or all their service charges until they vacate the scheme. However, whilst operators face a range of choices as to how to manage and recover these costs, questions are rightly being asked as to which amenities give the best value for customer experience and where the overall balance of cost: benefit sits.

Deferred fees (sometimes called event fees) can be a deferred payment of service charge but might also be a fee or profit to the operator in return for its upfront investment into the development and the supply of amenities. The use of event fees is gaining more acceptance both in the eyes of the public and the Government, with a primary focus on the overall affordability of the cost to a customer. The Law Commission explored event fees in 2017 and recommended that their use should be subject to new bespoke regulation under a statutory code of practice.  The sector agrees that this approach would work well to help demystify event fees for customers, Government and investors into the sector.

Many leading retirement housing operators already adhere to the Code of Practice maintained by the Association of Retirement Housing Managers (the "ARHM").  Unlike other similar codes, the ARHM Code has been approved pursuant to The Approval of Codes of Management Practice (Residential Property) (England) Order 2016, with bespoke codes for England, Scotland and Wales.  It promotes best practice in the management of leasehold retirement properties, and the core value of transparency lies at its heart. The ARHM Code therefore has an essential role to play in demonstrating and upholding the values of the senior living sector to Government and customers.

Overall, it is undeniably the case that operators are focused on two key priorities: making developments more affordable through better analysis and more efficient design; and improving consumer confidence with greater transparency about the charges and fees applied.

Whilst there are multiple policy asks of Government that would greatly benefit the sector (including SDLT and other construction-related tax reliefs or subsidies), planning remains top of the list for policy change. According to Knight Frank's 2025 figures, 43% of operators named planning as a challenge.  A further 27% listed planning delays as a barrier to growth.  The Government's recent Planning and Infrastructure Act 2025 and its proposed revisions to the National Planning Policy Framework contain measures to speed up and streamline the delivery of new homes and critical infrastructure (including through introducing a new scheme of delegation to modernise local planning committees and increasing the capacity of local planning authorities) and the sector hopes to see the impacts of these changes this year.

However, there is still work to be done, such as educating central and local government as to the social benefits of the senior living product (including reduced pressure on local NHS facilities, liquidity in local housing markets and other local economic benefits that flow from improved wellbeing), ensuring that all local plans include provision for senior housing and that the viability of senior living schemes is properly assessed in local plans and planning applications. A policy level acknowledgement as to the social investment of senior housing developments which can therefore remove the additional financial burden to fund affordable housing (which currently prevents many senior living sites coming forward) would increase provision and reduce planning delays.