An ageing population will have a significant impact on UK residential property market, report shows
An explosion of grey hair has significant implications for the future of retirement properties in the UK and the wider residential real estate market, it is claimed.
Retired people form the country’s fastest growing demographic group and older households will represent half of all household growth between now and 2026, according to the Retirement Housing Report 2010 from consultants Knight Frank.
It points out that it is important the development, construction and care industries recognise the trend as thinking and practice in the UK retirement sector has long lagged behind innovation in Australia, Scandinavia, the US and New Zealand.
‘Retirement villages have been popular for decades in these countries. However in the UK, there are still relatively few implying there are strong prospects for growth as the concept becomes better understood,’ said Liam Bailey, head of residential research at Knight Frank.
‘The growth in popularity of retirement villages stems, fairly obviously, from our increasingly ageing population and the growing assets its holds, but also from a growing tendency for older people to place a positive emphasis on the need for security, socialising opportunities and convenience. The need to release equity through a downsizing move may also impel a greater shift towards specialised retirement housing,’ he added.
In the UK, the majority of the over 65s, some 89%, live in mainstream housing. Just 6%, that is some 500,000 households, live in specialist retirement housing and 5%, 400,000, live in institutions for example residential care or nursing care accommodation.
‘Most people who retire do so as owner occupiers in mainstream housing. Recent studies have confirmed that the decision to move to retirement housing is almost always due to bereavement, frailty or the desire for close proximity to relations,’ explained Bailey.
‘A general definition of retirement housing would refer to purpose-built or converted accommodation for sale or rent to old people with a range of housing and care, social or recreational services provided. There are many options, but there is a real opportunity for purpose-built retirement housing, especially the retirement village concept, as long as developers get it right and account for modern day requirements,’ he added.
He also pointed out that people aged over 60 are living longer, healthier and more active lives and this will have a dramatic impact on the housing requirements for this age group.
‘Space demands are changing. Design must acknowledge that the social habits of older people now reflect those of the wider population in that their social networks are spread across the country with the consequent need to accommodate visitors,’ he said.
‘Also a growing proportion aged over 60 still work; many will be engaged in part-time consultancy based at home and therefore require extra space for their work or hobbies,’ Bailey added.
The ideal retirement village will typically allow residents to do as much or as little as they choose and receive whatever level of care they wish. Residents have their own front door and can cook for themselves or use the on site village’s restaurant. Fitness, library, entertainment and social facilities are often provided, the report indicates.
Care services generally offer nurses on call, so there is someone there to keep an eye on the residents and provide further care in the home as required. Structural maintenance and repairs are the responsibility of the village owner and residents are thus relieved of this burden.
‘The evidence from the US and Australia is that retirement villages can offer benefits to society as a whole because residents release under occupied properties for sale and this creates a small but useful stream of family homes. Retirement villages also create employment, and support viability of local services. Their regeneration potential is rather overlooked in the UK, but well recognised in the US, where they are seen as contributing to the reversal of long-term economic decline and adding to an area’s cultural life. However, few major regeneration areas here have specifically planned for them,’ the report concludes.