A call to action over the retirement housing crisis

COMMENT Events of the past year have shone a harsh spotlight on how the UK supports its ageing population. Older people have been impacted by the Covid-19 pandemic more than most, with many shielding and isolated at home. They have also sadly counted for more than 90% of fatalities. It is therefore essential that as a society we learn the lessons about how we can better support them, and central to this is housing. Thankfully, infection rates among the homeowners in our retirement communities have been half that of over-65s generally and lower even than the general population. Retirement communities have proved they keep older people happier and healthier, and an earlier report by WPI Economics found that residents in specialist housing feel as good as someone 10 years younger using nationally recognised wellbeing criteria.  However, despite its benefits, the supply of homes suitable for later living is not keeping up with demand – the UK builds around 8,000 new retirement properties a year against demand for 30,000. As a result, there are three million older people across the UK who would like to downsize to maintain their independence but cannot.  Ground rent ban We are working to make retirement living more accessible, introducing a multi-tenure offering, more flexible services like electric car clubs and additional care – and we are looking at modern methods of construction to increase supply and, ultimately, affordability. But government also needs to look at new ways to urgently help the sector address this supply crisis. We need to create an industry that provides more older people with the choice and access to appropriate housing that keeps them supported and independent for longer. This is why we were disappointed that the government’s proposed exemption for the retirement sector to the ground rent ban was removed by ministers in January as part of the latest leasehold reforms.  The retirement sector has used ground rent fairly, transparently and for a dedicated purpose. It is a core part of our development viability and used to subsidise the additional costs of constructing the significant communal spaces in our communities, which cost between £1m and £2m per development, and include restaurants, lounges and wellbeing suites. Simply put, ground rent had helped to make building specialist housing for older people viable. A three-point plan There now needs to be a sensible debate about the measures needed to create a sustainable, affordable and viable model for retirement housing in the UK, that works for consumers and operators. We have drawn up a three-point plan that we believe can help to truly drive the retirement sector forward. First, we want the government to adopt a bold and ambitious framework for increasing the supply of new retirement properties to 30,000 a year. This includes reforms to local planning policy and affordable housing contributions, which also limit development viability.  The government is already consulting on similar reforms to affordable housing for developments up to 40 or 50 homes, albeit on a temporary basis. If made permanent for the retirement industry, this could create a level playing field across the housing sector and increase viability and supply while also reducing prices.  Second, we have called on the chancellor to deliver a permanent stamp duty holiday for those moving into retirement communities. If made permanent, we, alongside others in the sector, strongly believe it would encourage and incentivise this demographic to downsize, promote the industry and lead to new supply coming forward.     Third, we believe there is a greater role for Homes England, including adopting a new target of making 10% of their new housing designed specifically for older people, expanding its affordable shared ownership offering for older people – which could become a similar programme to Help to Buy but for older people – and encouraging the use of MMC in the retirement sector.  To bring this plan together, we have asked the government to establish an industry taskforce to look holistically at how to provide more and better housing options for older people. These asks are about protecting the most vulnerable, ensuring we are delivering suitable housing for our ageing population and freeing up existing housing stock to support first time buyers and growing families.  We must now take this opportunity to create a bigger and better retirement sector. John Tonkiss is chief executive at McCarthy & Stone  Image © Richard Gardner/Shutterstock