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Published 5 septiembre 2019
International law firm DAC Beachcroft today publishes The Growing Market for Senior Living Accommodation, an analysis of the factors behind the growth in housing specifically aimed at older people in the UK.
Robert Lee, Head of Residential at DAC Beachcroft, said, “This report indicates that greater focus on developing housing for older people can bring benefits for the occupier: financial, physical and mental. As an asset class with plenty of room for expansion this area is receiving increasing interest from investors and developers.”
The report’s findings are summarised below.
At the upper end of the market there are a growing number of developments that provide high quality amenities, some domestic assistance and service charges that include utilities and maintenance. Extending provision to an intermediate market aimed at serving older people unable to afford the higher end, but not eligible for social housing, requires a supportive legal and regulatory framework which enables new models of senior living housing and a wider range of providers.
Senior living unit providers are changing their business models by offering more flexible buying options including shared ownership options, as well as rental and home ownership. These alternative buying models can help reduce the amount of stamp duty – in the current system – so reducing the penalty for older people who are downsizing. Changes to design, planning and information available to people would all also help make for more choice. Technology will be a helpful enabler in both the construction and design of these homes, to make them as safe as possible.
Significant shifts in population distribution will shape the emerging asset class of senior living. By 2030, 20% of people in the UK will be over 65. In particular, for the 65-75 age bracket, they will have an anticipated average of 10.6 years of healthy living and will also stay in work longer than their predecessors. Evolving models are becoming more sensitive to what these healthy senior need and want, including the greater provision of accommodation in town and city centres which offer greater opportunities for employment.
Around 6,000 senior living units came to market last year, but estimates suggest that there is an annual demand for three to five times higher than that. In 2017/2018 three quarters of older households owned their homes outright. There is the potential for this group to release equity from their property by moving into smaller, more convenient accommodation, but many feel there current options are inadequate.
The report was researched by Dr Margarethe Theseira, an independent consultant specialising in urban economics. She has extensive experience in providing investment, policy and strategy advice to clients in the private, public and charity sectors. She spent over a decade managing the economics and intelligence functions for the Mayor of London and Greater London Authority Group. She served as the Chief Adviser to the London Fairness Commission, is a Principal Fellow at University College London and holds a PhD in modelling from Cranford University.
Read the report in full here.