Next steps to supporting later living’s golden age

COMMENT The later living sector has been picking up pace and attracting stable investor interest. However, there are several matters that industry players and the government need to address to ensure it keeps the momentum going. Panellists at ARCO’s recent later living conference set out the key issues that will shape the sector in the year ahead, including upcoming recommendations from the Older People’s Housing Taskforce. Housing minister Rachel Maclean was in attendance – an encouraging sign that the government is committed to supporting the growth and diversification of the sector, and it was clear that she is well versed across her brief. Lift the fog Although it is still early days for the Older People’s Housing Taskforce, with final recommendations not due until May 2024, taskforce chair Julienne Meyer provided a few insights into early thinking and key areas of focus. I was pleased to hear that tackling issues in the planning system will be a top priority, as well as advocating for measures that will boost the appeal of later living options to consumers. The taskforce must look at how to lift the fog of confusion around event and deferred management fees, which are the payments made upon certain events, such as the sale of a unit. The structure of such fees is often viewed as hidden or onerous and the taskforce should seek to ensure greater transparency and clarity, which it is hoped will assist in increasing consumer confidence in the sector. The taskforce would do well to build on the Law Commission’s 2017 recommendations in relation to event fees, which were confirmed for implementation by the then Ministry of Housing, Communities and Local Government, although a timetable for this has yet to be announced. Event/deferred management fees should not be eliminated but restructured. If applied ethically, innovative charging models can deliver advantages to developers, operators and consumers alike, not least in boosting the viability and pace of new developments. From a consumer perspective, the sector needs to look at affordability and offering different tenure models and a range of price points. This is particularly evident in the case of integrated retirement communities, where consumers have the choice to either rent or buy a unit in a development, and balance event fees against other types of payment options during their period of ownership. ARCO emphasised the need to educate potential occupants about the options available to them, which should also serve to increase consumer trust in the later living sector. OK, boomers It would be beneficial for the sector to adopt ARCO’s proposed “leasehold plus” model, which aims to make leasehold ownership of later living units more flexible and adaptive to the needs and requirements of the occupiers of later living developments and to add in consumer protections, with the intention of boosting consumer interest in such schemes. Regarding planning, there remains large-scale support for the creation of a specific use class for later living and removing CIL charges, to make them more viable. The great news is that growth is not just reliant on interventions. As pointed out by Bobby Duffy, professor of public policy at King’s College London, baby boomers, with their relatively high levels of wealth, are only just coming to the age when they are more likely to move into later living residences. Their arrival into this age bracket will create the demand needed to significantly boost supply for the next 15-20 years, signalling that a “golden age” for the later living sector is on the horizon. Amy France is a partner at Forsters