The fact that the UK’s population is ageing has been well documented; in 2017 18% of the population were aged 65 and over. Understandably, when the property market is discussed, a lot of attention is directed towards the plight of first time buyers and their need for affordable housing. However, there is another important group that are not having their housing needs met and they are retired people. Retired people who are usually empty-nesters, receive considerably less attention but are facing their own housing crisis..
Homes For Retired People
Homes for retired people is a fast growing sector of the property market. The sector can be further sub divided into retirement housing with less care on site and housing with care that includes communal facilities and on site care. The retirement housing segment is the bigger segment and was worth £29 billion in 2017, twice the size of the care home segment. More retirement housing would allow older people to downsize and would therefore free up larger houses for those who need them. Currently there are 725,000 retirement housing units across the UK which make up 2.6% out of a total of 28 million homes. As this sector continues to develop, there is the potential for large growth in the amount of private housing for retired people.
What is the Opportunity?
Property investors are now aware of the opportunities this market presents, the best retirement housing command sales premiums of 30 to 40 per cent over equivalent non retirement housing in the same area according to David Birbeck, one of the authors of Housing our Ageing Population. Knight Frank estimates that the over 60s in England alone have over £1,200 billion in unmortgaged housing wealth. The demand for high end retirement housing far exceeds supply, property investors and developers are now creating new homes typically for the over 55s only with impressive communal amenities including, gyms, pools and gardens. Retirement housing allows investors to deliver returns from operational care, leisure and development.
I have not yet invested in a project delivering homes specifically for retired people but it is a sector that I am following with interest.
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Image credit: Cooper’s Hill ( Audley Retirement)
This is blog post number 25.