The number of specialist seniors housing units across the UK will grow by nearly 10% over the next five years, according to a report from property consultancy Knight Frank.

The number of seniors housing units in the UK, currently around 750,000 distributed across 25,000 schemes, will grow to 820,000 by 2025, the report predicts. A substantial increase in schemes with varying levels of onsite care, as well as rental-only options, is also to be expected.

The increase in delivery is being fuelled by the inflow of new investment and a growth in new operating platforms. Already this year, £450 million of capital has been invested in the sector and Knight Frank has identified an additional £1.3 billion due to be committed. Investment into the seniors housing sector has been strong in the first half of the year, and this is expected continue.

The amount of capital already committed means total investment volumes for 2021 should exceed those of last year.

Annual delivery has risen from a previous historic average of 6,690 units a year (2011-2015) to 8,293 a year (2016-2020). Knight Frank predicts that annual delivery will increase further – reaching 14,000 units a year by 2025.

Lauren Harwood, an associate in the seniors housing team at Knight Frank, said: “In response to an ageing demographic, the need for age-appropriate housing has grown significantly. Ranging from standard housing through to aged care facilities, the offering of seniors housing in the UK has evolved markedly over the past decade and will continue to do so.”

The report’s analysis of the future pipeline points to a move toward providing more choice for residents, including through mixed-tenure and rental-only options and more schemes with varying facilities and services. Housing with care schemes account for 57% of the identified pipeline, with nearly 18,000 units either under construction or with planning submitted or granted. There are just over 13,200 retirement housing units in the development pipeline.

The rise in rental product is also growing. The number of private senior living rental properties in the UK is forecast to increase by 166% in the next five years, from almost 5,000 currently to more than 12,000 by 2025. Growth will be driven by a rise in the number of housing with care operators allocating a proportion of their pipeline to the rental market. Even accounting for such rapid growth, senior housing rental stock will only account for 5% of the total number of private senior housing units, which is currently dominated by ‘for sale’ stock.

Despite the positive outlook for delivery, it is still falling well short of demand.  The rate of delivery is dwarfed by the UK’s ageing population. Over the past five years, 41,464 new seniors housing units have been built, while the population of 75-year-olds in the UK has risen by more than 550,000.

Harwood said: “It’s clear that a step change in new delivery is required if this huge imbalance between need and supply is to be reversed.”

Planning also remains a key barrier for increasing the delivery of seniors housing in England, with the vast majority of councils across England underprepared to provide suitable housing for seniors. A report last year suggested that more than half of England’s local authorities don’t have clear planning policies in place to support housing for seniors.

Tom Scaife, head of seniors housing at Knight Frank said: “Properly incorporating and planning for senior living will reap huge socioeconomic benefits for local authorities, developers, residents and the wider community. Financial savings to local authority care services; release of local family housing back to the market via downsizing; local employment generation; reduced impact on highways and other local services; a post-Covid-19 rejuvenation of high streets; and contribution to housing supply targets are all significant reasons why we need increased delivery. Seniors housing can also help prevent loneliness and isolation in older age, and help facilitate positive mental health and general wellbeing.

“There is a need for authorities, developers and communities to adequately plan for housing across age brackets to meet the needs of their communities. Having a proper policy framework, housing targets and separate use class for seniors housing should be a requirement rather than an expectation.”

Date published: July 29, 2021

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