International and UK property developers are missing out on opportunities in the UK to build developments aimed at the growing elderly population in the UK. According to Knight Frank’s ‘Retirement Housing Report’ 2010, retired people form the country’s fastest growing demographic group.
Liam Bailey, head of residential research, Knight Frank, commented: “An explosion of grey hair has significant implications for the future of retirement housing and the wider residential market. Older households will represent half of all household growth between now and 2026 and it is important that the development, construction and care industries recognise this opportunity.
“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.”
“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.”
In the UK, the majority of the over-65s (89%) live in ‘mainstream housing’. Just 6% (that is some 500,000 households) live in specialist retirement housing and 5% (some 400,000 units) live in institutions for example residential care or nursing care accommodation.
Bailey said: “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. 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.
“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.
So what makes a good retirement village?
Emma Cleugh, head of institutional consultancy, Knight Frank, who is involved in the valuation, acquisition and sale of development sites suitable for retirement housing developers, commented: “A good 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. 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.
Jon Gooding the Chief Executive of Retirement Villages Ltd, the largest UK owner and operator of retirement villages, says that the most frequent comment made by residents is: “I should have made the move 10 years earlier”. He sees the challenge for the sector to be to increase awareness of this option and to attract the “younger older” to make the shift sooner”.
Bailey continued: “Developers also need to consider technology from every perspective. Whilst the current generation of retired people did not grow up with it – today’s retiree is likely to be doing their weekly shop on Waitrose.com or working part-time from home but when the need arises they and their families will want to be sure that the infrastructure and technology is there for their safety and security. Important tools include electronic ‘call’ facilities, gate security, passive health assessment technology. In design terms, the best schemes look as little like an institution and as much like a private home as possible. The usual check list applies – maximum use of light, sensible organisation of space, cupboard and power points at sensible heights etc and externally attractive use of water and greenery. It is only under the surface that these developments are increasingly bristling with gadgets and technology.”
Development opportunities currently available:
St Joseph’s Retirement Scheme, Mill Hill, London. This is a 110,000 sq ft Grade II listed C2 use building with planning permission for a 115 unit retirement development (studio rooms with individual en-suites and large communal areas) for sale through Knight Frank with a guide price of £25million.
Featherstone Lodge, Forest Hill, London. This is an 11,000 sq ft C2 use property with development potential for a care village in the grounds which extend to 1.7 acres, subject to gaining the necessary consents, for sale through Knight Frank at £3.5million.
Source:Knight Frank LLP
