Retirement Housing development marches on
The number of Seniors Housing units and schemes increased last year as the market continued to evolve.
3 minutes to read
The composition of the Seniors Housing market in the UK is shifting. Over the past decade, our research points to an uptick in the range of accommodation options available to seniors. Mixed-tenure and rental only options have increased, as well as greater affordable housing provision and schemes with varying levels of facilities and care facilities.
Retirement Housing product continues to lead in terms of scheme openings. Our data shows that, of the 145 seniors housing schemes which became operational in 2022, 84 (or 58%) were Retirement Housing projects, supported by robust supply pipelines from established UK developers including McCarthy Stone, Churchill, Lifestory and Beechcroft – who all opened multiple schemes last year. The remaining 42% of schemes were Integrated Retirement Communities (IRCs), which offer greater amenity and care provision and are often larger in scale.
In total, the data shows that more than 3,300 Retirement Housing units were built last year, split across private for sale, social rent and private rent tenures. Cumulatively, over the last five years, nearly 20,000 retirement housing units have been added to supply, 11% higher than IRC delivery over that time.
Looking forward, we anticipate the balance of power will shift, with the IRC segment of the market forecast to lead in terms of new units built. Our expectations are that 34,015 new IRC homes forecast to be added to supply between 2023 and 2027, compared with an uplift in Retirement Housing stock of 23,305 over that same time.
In part, that reflects a trend towards larger IRC developments being completed, with bigger schemes helping support viability to deliver 24/7 on-site care and a range of communal amenities. Reflecting this, our analysis of schemes completed in 2022 shows that the average size of a Retirement Housing scheme was 36 homes, around half the size of the IRC completed last year. Further analysis of the development pipeline confirms this shift. While more Retirement housing schemes will – again – be completed in 2023 compared with IRCs, their smaller size means IRCs will account for a larger share of the overall number of seniors housing units built.
More propositions and more choice needed
Regardless of the type of product delivered, it’s clear that more supply, more propositions, and more choice are required to address the significant shortfall of seniors housing supply relative to demand across the UK.
ONS forecasts suggest that by 2040 there will be an additional 4.2 million seniors, at which point 25% of the population will be aged 65 or over. And delivery of new seniors housing units has picked up in recent years, annual delivery accounts for just 3% of the total number of new homes built each year.
The Mayhew Review, published at end of 2022, provided independent verification of the scale of the accommodation challenge. It recommended that the government adopt a seniors housing target of 50,000 units a year to 2040 to keep up with demand. Based on current supply this equals over a million additional units needed by 2040.
For more analysis download the Seniors Housing Development Update.