Amy France tells EG about the diversification of the later living sector
After a lacklustre year so far, we are finally seeing some positive movements in the later living sector. The exciting part is that many of the new developments demonstrate the diversification of the industry in terms of ownership models and affordability, both of which have been anticipated for some time.
Although the primary focus on the Older People’s Housing Taskforce has been to explore ways to increase the provision of homes to meet a high level of projected demand, we are also anticipating in-depth guidance on how the sector should adapt to meet the increasingly sophisticated nature of those consumer demands. In practice, this means a much greater choice of tenures across a much wider variety of locations.
We might still wait with bated breath for the outcomes of the task force, however there are signs that the sector is already rising to the diversification challenge, fuelled by a gradual increase in investment.
Affordable options
A recent example is New York-based private investor Meadow Partners’ partnership with shared ownership specialist Affordable Housing & Healthcare Group to build a £500m senior living shared ownership portfolio. AHH is an affordable housing-focused provider with a footprint in the South West which has a unique shared ownership model, in that it typically sells off 50% of its retirement living developments and rents the other half to occupiers. In a similar move, albeit on a smaller scale, Vistry Group has recently agreed a £19m deal with Anchor to build 77 affordable homes in the East Midlands.
It is not just affordable housing that is spreading beyond its usual parameters. We are also seeing retirement villages, most commonly found in London and the South East, gaining ground elsewhere in the UK. In this regard, Adlington Retirement Living stands out, having recently announced plans to build a 96-home community in Leicester, to add to its 18 independent retirement communities created since 2008 across the North West, Yorkshire, Wales, Bedfordshire and the Midlands.
The level of amenity is an area that can be adjusted by developers to deliver more affordable options, with some developments scaling back to one multi-purpose community room to accommodate social activities. Mid-market solutions might, for example, forgo an on site restaurant, particularly in town centre locations, where there is less need.
This trend will continue as economic conditions improve and developers become more ambitious in terms of scale. Shared facilities between a higher number of homes reduces operating costs and consumer prices. There is also hope that the new government, with its emphasis on housing delivery, might finally reduce some of the current strain on senior living developments caused by the planning system and serve to boost numbers.
Catalyst for action
Another key shift is a growing provision of rental housing for older people. This is happening for a plethora of reasons that deliver multiple benefits to consumers, providers and the general health of the housing market. These include greater flexibility over the timing of the sale of the family home, quicker access to services and care, no maintenance worries, no exit fees and no long resale periods.
So far, Birchgrove is the only dedicated developer building retirement homes solely for rent. But with such a huge and growing demand, others are likely to follow. Birchgrove itself is exploring different formats. For example, in conjunction with Hybr, the developer has launched an intergenerational living scheme in north London which will see students, key workers and retirees living alongside one another.
As the sector races to address the deficit of housing for older people, it is pleasing to see that, at the same time, careful thought is going into meeting the needs of a diverse range of people. The eventual publication of the findings of the task force should act as a further catalyst for action, with backing from the UK’s new pro-housing and development government.
It would be great to see Labour’s planned new towns becoming a template for delivering the right balance of the different types of senior housing into a single location. Certainly, the older generation deserve to have their varied needs met just as much as other demographics, such as first-time buyers and families, which have been the priority for so long. Let’s hope that this new focus on diversification continues at pace.
This article was published in EG on 26 October 2024.
