These days, the sector is where student housing was a few years ago. Indeed, many of those who attended Property Week’s Retirement Living conference last week said they thought it had even greater potential than build-to-rent.
It is not hard to see why. The UK currently lags way behind the US and Australia, and there is huge scope for growth in both the range of housing offered and the volume. At the moment, lots of different models are being explored. One of the most exciting for real estate investors is the rental model.
While there is an assumption that Brits always want to buy, the evidence shows there is also strong - and growing - demand for rented retirement homes. If more people do elect to sell up and downsize to rental property, as predicted, it would open up the market to deep-pocketed pension fund capital and retirement living truly could become the next student accommodation sector growth-wise.
However, the positive outlook for the sector is threatened by government policy in a way you can’t imagine student accommodation ever would be. All the government’s efforts are focused on helping first-time buyers and there seems to be nothing to help those at the other end of the housing spectrum age-wise and nothing to incentivise retirement housing developers, even though they are the ones helping free up housing stock by allowing older people to downsize. There is also no acknowledgment from policymakers of the higher costs facing retirement housing developers.
The positive outlook for retirement living is threatened by government policy in a way you can’t imagine student accommodation ever would be
In London, four of the biggest players in the market are warning that the situation under the mayor’s new SPG is so bad they will be able to bring forward “few if any” schemes in the capital as long as the guidance is in place.
Their concerns need to be addressed if the potential of the sector is to be realised and if the government is serious about tackling a key factor contributing to the housing crisis - the homes that could be freed up if there was something half decent for retirees to downsize to.
Retirement living is not the only sector at a critical juncture. At this year’s Mapic international retail property trade show in Cannes, the mood was more upbeat than at the last few shows.
Unsurprisingly, there was much talk of cutting-edge tech and the growing importance of leisure and food & beverage provision in a successful retail offer. However, some noted that F&B was not performing as well in the UK as it is in the US.
Others pointed out that several brands that had started in London and tried to expand to the regions were failing, while some chains were downsizing. Maybe they should work harder to adapt their offers to the regions. One size clearly does not fit all.
Join Property Week and CBRE next Thursday for our Twitter debate on one of the biggest issues in the student housing sector: affordability. It is taking place ahead of our must-attend Student Accommodation Conference & Awards on 7 December at NCC Birmingham, tickets for which are going fast, so don’t miss out!