Article | Adaptive Spaces
Senior living offers more than just bricks and mortar
November 29, 2023 5 Minute Read
It has been well documented that the UK is suffering from a housing shortage. The Government’s national housing target of building 300,000 net new homes per year by the mid-2020s looks unlikely to be achieved. According to Centre for Cities, the UK’s chronic housing shortage is one of the biggest challenges the country faces, with a downward trend in planning approvals highlighting the disconnect between the planning system and local demand. One proposal to free up properties has been to encourage 65+ year olds to downsize and unlock family-sized houses. Housing Learning and Improvement Network (Housing LIN) estimates that there is somewhere between £750 billion to £3 trillion worth of housing equity held by our elderly populations that, if sold, could unlock around 3.5 million properties (18% of the property market) onto the housing market. While this isn’t the right option for all and is a matter of personal choice, CBRE’s Senior Living Survey noted that 75+ year olds are more willing to consider downsizing than other age groups, and this cohort is looking at ways to reduce day-to-day living costs.
One of the major benefits of downsizing is to free up housing equity to assist in funding one’s retirement. Yet lack of suitable housing alternatives and cost restrictions make downsizing financially unviable or socially unfavourable. Retired seniors who feel fit, healthy, and enjoy an active social life are not willing to downgrade their living standards. Senior living residences, or Integrated Retirement Communities (IRC) are usually one or two-bed properties in a purpose-built residential led scheme. While offering the resident the chance to maintain their independence, they also the offer assistance and support that residents may require as they age. The UK senior living provision rate currently sits at less than 1%, and if the provision rate were to reach the industry target of 5%, this would require the development of 614,000 age-appropriate homes across the UK. Although this is not enough to fully address the shortage of suitable homes for potential downsizers, this could still contribute to providing age-appropriate housing for older people.
When it comes to retirement, what are you most concerned about?
Source: CBRE Research
While housing shortages have been dominating headlines, loneliness, financial and wellbeing worries also pose significant challenges to an ageing population. When CBRE’s survey respondents were asked what concerned them the most about retirement, the most common concerns were listed as health, financial, loss of independence, and loneliness. Age UK has reported that 1.4 million older people in the UK are often lonely. Loneliness is a major issue that is now widely recognised in society today. The concept of senior living aims to address social and health concerns of older age groups, and the services help to alleviate loneliness and isolation; residents can lead or take part in community activities, and with on-site care and assistance if needed. Respondents who had experience of senior living listed “social interaction” as a key reason for a positive reaction. Proximity to public transport is key when choosing development locations, as residents require easy access to central locations and amenities.
Financial concerns are also a key motivator when seniors consider downsizing. 75+ year olds are more willing to consider downsizing. They will be looking at ways to reduce day-to-day living costs and release funds to enjoy their retirement and potential support needs. This highlights a key target market for senior living. According to a single person will need about £13,000 a year to achieve the minimum living standard, £23,000 a year for moderate, and £37,000 a year for a comfortable one. Household maintenance, energy bills and day-to-day living will be a concern when considering retirement, so the option of housing inclusive of bills and maintenance can be appealing.
While there are residential options available for seniors considering downsizing, new-build, age-inclusive models have typically been targeted at families or young professionals. Other residential models have not been built around social interaction and care for older people. If the senior living provision rate is able to reach industry target of 5%, this would alleviate housing pressures as well as providing age-appropriate housing where wellbeing and social interaction are key.
Get in touch with our team for our 2023 Senior Living Survey findings.