Editor: I was pleased to read that Fortwell Capital has lent more than £450m to purpose-built care home and retirement living developers, creating more than £850m of value within the senior living sector.
A more attractive proposition to those of retirement age makes the decision for retirees to sell the large ‘family’ property they have owned for decades a much easier process. This is hugely positive – there is currently a lack of suitable family homes on the market.
As people age, they tend to own larger houses for longer despite not necessarily having a practical need for the space. Our analysts have calculated the value of housing owned and occupied by the over-65s to be more than £1.6trn, meaning the industry could see 15% of all over-65s potentially owning and living in a retirement property.
The overall benefits of a larger retirement living sector are substantial. Communities that allow older people to age well, and have help on hand should the need arise, are vital to free up much-needed stock, address isolation and reduce spiralling social care costs.
Government incentives, such as stamp duty exception for downsizers, could certainly help. The government would ultimately raise more tax as it is estimated that each top-of-chain home sale facilitates about 2.7 other sales, thereby generating more tax overall, while political reform, such as changes in the Health and Care Bill that will become law in April 2022, will affect the desirability of retirement communities.
In my view, the single biggest obstacle is planning, particularly local planners who are not aware or properly educated on the products, challenges for development and the benefits for the community. A nationwide education-led road trip to every council could have a big impact on the sector’s future, while adding ‘retirement’ as a use categorisation will also reduce the social housing burden on developers and allow them to compete with non-retirement developers for land.
This multifaceted approach across the sector will provide much-needed viable alternatives to the downsizing generation, unlocking valuable later-life living communities.
Cormac Henderson, chief executive, Spring