Next steps to supporting later living’s golden age – Amy France writes for EG
Commercial Real Estate Partner and Head of Later Living, Amy France, has written for EG on the growth of the later living sector and how, despite this, there are several issues in need of government and industry attention in order to maintain the momentum.
Having attended the annual ARCO later living conference, France writes of how the panellists, one of whom was Housing Minister, Rachel Maclean, “set out the key issues that will shape the sector in the year ahead, including upcoming recommendations from the Older People’s Housing Taskforce.”
Lifting the fog
Despite the recommendations of the Older People’s Housing Taskforce not due until May 2024, chair Julienne Meyer provided some early insight with France pleased to hear that planning reforms will be a priority, in addition to measures that will boost the appeal of later living options to consumers.
France writes how the Taskforce must also look to clarify the use of event and deferred management fees, “which are the payments made upon certain events, such as the sale of a unit.” Providing this clarity will undoubtedly help increase consumer confidence in the sector.
France believes that the Taskforce should build on the Law Commission’s 2017 recommendations in respect of event fees, which were confirmed for implementation at the time but have still not yet reached the statute books. “Event/deferred management fees should not be eliminated but restructured. If applied ethically, innovative charging models can deliver advantages to developers, operators and consumers alike, not least in boosting the viability and pace of new developments.
“From a consumer perspective, the sector needs to look at affordability and offering different tenure models and a range of price points. This is particularly evident in the case of integrated retirement communities, where consumers have the choice to either rent or buy a unit in a development, and balance event fees against other types of payment options during their period of ownership. ARCO emphasised the need to educate potential occupants about the options available to them, which should also serve to increase consumer trust in the later living sector.”
France believes that the sector should adopted ARCO’s proposed “leasehold plus” model, which aims to make leasehold ownership of later living units more flexible for occupiers, as well as boost consumer interest in such schemes by offering more protections.
France supports the advocacy for a new, bespoke use class for later living and the removal of CIL charges to make them more viable.
She concludes by writing: “The great news is that growth is not just reliant on interventions. As pointed out by Bobby Duffy, professor of public policy at King’s College London, baby boomers, with their relatively high levels of wealth, are only just coming to the age when they are more likely to move into later living residences. Their arrival into this age bracket will create the demand needed to significantly boost supply for the next 15-20 years, signalling that a “golden age” for the later living sector is on the horizon.”