When it comes to solving the housing crisis, the government is ignoring the quick wins it could achieve by supporting the retirement living sector. That’s the message from Clive Fenton, chief executive of McCarthy & Stone.
Analysis carried out by the company found that those aged 65 and over have £1.34trn of housing wealth and that more than a third of them want to downsize. If they did, it would release £483bn worth of homes, it suggested, making investment in retirement housing a ‘win-win’ for the government.
Property Week caught up with Fenton to find out more about how the retirement living sector can contribute to solving the housing crisis and why so few developers are entering the market.
Where is the market at the moment?
Retirement living is a buoyant and interesting market - this is where house price growth is going to be and it’s an area that will only increase in importance. The population is ageing and elderly people have wealth. And yet the turnover of stock is low relative to mainstream housebuilders in, for example, the first-time buyer market.
That’s why we haven’t really seen other suppliers move into the sector fully and we have been able to maintain a strong market position with more than a 70% share.
Why is it so difficult to enter the market?
It’s a specialist market with specialist needs. So there’s a whole different skillset you’d need in terms of managing the customer journey. Also, it’s a longer sales cycle, with specs to suit the requirements of the different age groups we cater for.
Build-to-rent developers are increasingly partnering with housebuilders. Are you doing the same?
We always focus on brownfield sites, ideally in town centres and not more than half a mile from facilities. Our land bank now stands at nearly 10,035 plots. That’s the equivalent of 4.4 years of supply and 2.7 years have full planning consent.
That means we are increasingly working with major housebuilders - for instance with Cala Homes on our Ickenham development and our 60 assisted living apartments within Taylor Wimpey’s Great Western Park - to complement and grow a community. We’re good partners as there is no competition and are very willing to work on innovative solutions.
How has proptech affected the sector?
Over-65s make up the fastest-growing sector for tech adoption and we predict that within the next 20 years, older people could be living in an intelligent ‘cognitive home’ that is able to read, assess and manage individual needs and desires.
It’s a lifestyle solution we are putting in place, tackling loneliness through communities enabled through technology and our knowledge of the sector.
Is the government focusing on other areas like BTR and first-time buyers at the expense of retirement living?
There’s nothing stopping the growth of BTR and retirement living side by side. The retirement housing sector has the capacity to go from 5,000 to 20,000 or even 30,000 units a year, but only with the right incentives.
Stamp duty relief would be one. On a one-acre plot we can provide 40 homes, so if we have stamp duty relief for those who are downsizing, that will enable them to free up their own homes and actually, it frees up homes all the way down the chain.