Later living rental market to grow by £2.65bn in five years

The UK later living rental market will grow by £2.65bn over the next five years, according to new research from JLL. Customer demands for greater flexibility have led to increasing investor interest in the sector, which has traditionally relied on build-for-sale. In the past 10 years there has been a 200% increase in the number of retirement living schemes offering market rent as a tenure and a 400% increase in the number of market rental homes available. JLL predicted that 2022 will herald the largest ever year-on-year increase for rental units. Researchers also estimated 5,632 new homes will be added over the next five years. The findings show there are 8,175 homes across 171 schemes in the rental market for emerging integrated retirement communities. Of the IRC schemes built in the past five years, 28% include a market rental option. This compares with a 91% increase in the number of market rental homes in retirement housing – self-contained homes for sale, shared ownership, or rent – over the same period. The market has also seen a 45% increase in the number of schemes with a rental option. The report’s authors said half of the schemes offering market rentals offer the ability to purchase, rent or enter into a shared-ownership agreement. However, a growing rental-only offering was identified, with three IRC operators having no for-sale option on their homes. Anthony Oldfield, director, of healthcare capital markets, said: “Operators and developers are adapting to a sea change in the mindset and demands of a new generation of customers. “We are seeing a greater emphasis on build quality, top-of-the-range facilities and amenities, and a wider range of services and products, which are a far cry from some of the older ‘sheltered housing’ models.” Daniel Thorpe, senior research analyst, said: “Investors experienced in build-to-rent strategies are broadening into retirement rental homes. This focus is part of a broader trend towards greater institutional interest into the retirement living sector, following the trajectory of advanced markets like the US. “For investors, the retirement rental model provides a unique opportunity to diversify their portfolios in a sector with positive ESG credentials backed by strong demographic forecasts. For customers, the evolution of the sector will bring greater choice and flexibility in later life.” To send feedback, e-mail akanksha.soni@eg.co.uk or tweet @asoni7185 or @EGPropertyNews