Breaking the stasis on senior living development
The gap between residential supply and demand continues to widen, and the current high interest rate environment is only serving to compound the issue – posing real challenges when it comes to funding and bringing much needed new schemes forward.
One part of the residential market that is really feeling the strain of these supply constraints is the senior living sector.
The most recent Census, completed in 2021, showed that nearly one in five people in England and Wales are aged 65 or older. This is the highest proportion in this age bracket ever recorded – and the elderly population is projected to only keep expanding, with people aged 65 and over set to make up 24% of the population by 2043.
So, with supply in the sector squeezed and demand acutely increasing, where will these older people live?
2022 was the strongest year for senior living housing delivery since 2018. Data from Knight Frank shows that 8,000 new senior living homes were built last year – up on the annual average of 7,000 that was outlined in the Mayhew Review published in November 2022.
Momentum may be building in the sector following high levels of investment, but the number of new homes being brought forward is still lagging behind the 50,000 that are predicted to be needed every year. The culminative impact of this lack of delivery means that the UK now faces a shortfall of 487,000 senior living homes, according to BNP Paribas.
While this is a nationwide, systemic issue, there are parts of the UK where if swift action isn’t taken to increase development, the chronic undersupply of senior living homes could have a detrimental impact on older communities, with implications on health and wellbeing.
One prime example is in Manchester where CBRE is forecasting the city to have one of the highest increases in the 65+ year old population across its top 10 UK growth cities.
Data from the Greater Manchester Combined Authority (GMCA) backs this up, showing that 454,000 residents in Greater Manchester are over the age of 65. By 2035, three in 20 residents will be 75 years or older. Almost one in three will have a long-term illness.
The GMCA is responding to this challenge, launching a framework for Creating Age-Friendly Homes in Greater Manchester and committing to creating a Greater Manchester Age-Friendly Housing Charter that ‘sets out a practical guide of considerations when developing new homes and retrofitting and investing in existing homes, to deliver age-friendly homes’.
The creation of the framework and charter raises important themes. This includes a focus on rightsizing - breaking barriers preventing older people from downsizing and unlocking housing stock, particularly for families and young people.
When combined with the Greater Manchester Ageing Hub and Greater Manchester Age-friendly Strategy, senior living now forms a key part of the conversation on housing delivery and planning policy in Manchester. A range of schemes are now also coming forward.
For example, Manchester City Council recently updated on plans to create the first purpose-built apartments for LGBTQ+ older people in the city. The 100-unit scheme has, however, been in the pipeline since 2017 – demonstrating the time it can take to bring projects forward, even when Council-led and initially proposed during a period of relative stability, or at least less instability.
To make any progress towards hitting the Mayhew Review’s recommendation of delivering 50,000 new senior living homes per annum nationally, it’s clear that urgent action must be taken to break the stasis on development. This is reliant on the resources and skills of – and co-operation between - local authorities, investors, developers and operators, but, most importantly, it is dependent on national reform.
One of the key tools available to boost the delivery of senior living housing is planning policy.
Steps must be taken be to strengthen the National Planning Policy Framework (NPPF) and prioritise developing senior living homes. The framework currently refers to ‘older people’ as a group that should be catered for when it comes to ‘delivering a sufficient supply of homes’.
The Levelling-up and Regeneration Bill includes a requirement that the Secretary of State must issue guidance for local planning authorities on how to address housing needs that result from old age in their local plan and any supplementary plans.
The Bill’s consultation also included a section on senior living, and referenced adding an additional expectation to the NPPF to ensure ‘that the needs of older people are met, [and that] particular regard is given to retirement housing, housing-with-care and care homes’. This legislation could add more weight to older people’s housing needs.
Further changes are essential, however, to bringing in the top-level reform required to establish a more consistent approach to the delivery of housing for older people - facilitating more development, but also ensuring the provision of quality and diverse housing choice.
The Older People’s Housing Taskforce launched in May 2023 and is due to produce an independent report to the government. As part of this, it has launched a consultation – closing 18 September - to better understand the market and needs for older people’s housing. The consultation is aimed at organisations, providing developers and operators in the sector with the chance to share recommendations and ultimately shape future policy.
With the Taskforce now operational and Levelling-up and Regeneration Bill moving through Parliament, there is an opportunity to implement impactful policy changes – utilising the planning system to promote development and begin tackling the UK's senior living housing shortage.
Kirsty Chalkley is a real estate partner at Shoosmiths
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