Rising demand for senior rentals highlights urgent need for more age-appropriate housing in the UK

Written by Melanie Mason Associate Property Director West Region at My Future Living

The ‘UK Seniors Housing Market Update Q2 2024’ from Knight Frank[i] brings positive news that the supply of new seniors housing stock across the UK is increasing. In 2023, more than 9,160 new seniors housing units were built, up 20% on the previous year’s delivery and the strongest year for new supply since 2016.

However, despite progress, the supply of new seniors housing remains insufficient to meet the needs of an ageing population, both for sale and rent. This mirrors our experience, where we are seeing growing demand for one-and -two-bedroom rental apartments in retirement communities across the UK.

Senior rental homes on the rise

More people could be renting in later life. A report from UK Collaborative Centre for Housing Evidence (CaCHE)[ii], on behalf of the charity Independent Age, projected that by 2040, almost a quarter (24%) of over 65s will be living in private rented sector (PRS) housing.

Catering to this sector will become increasingly important, including the development of retirement homes for rent so that people aren’t stuck in PRS.  The Knight Frank report also highlights the growing importance of giving people choice with more rental properties designed for older people.

Demographic shifts

Office for National Statistics[iii] data predicts there will be an additional four million seniors living in the UK by 2043, with the over-65 age cohort expected to grow at three times the pace of the national average. This will drive demand for retirement housing, particularly affordable rental options for those looking to downsize or move from PRS. A decline in homeownership will also have an impact on demand. A study by Homeowners Alliance suggests that around 1.9 million aspiring homeowners do not think they will get on the property ladder like their parents.

Social connections and improved quality of life

The government has set an ambitious target to build 1.5 million homes over the next five years[iv], and retirement housing must be part of this. Good-quality, purpose-built homes for older people can significantly improve their quality of life and contributes to broader social benefits.

Retirement communities bring benefits beyond downsizing. They provide residents with the opportunity to live independently but have access to social activities. Most apartments we rent are in developments with communal lounges and gardens for socialising, and many organise outings. For older people who live alone this can be a real lifeline.

Safety and security are also key benefits. Living in retirement community means having close neighbours and a house manager overseeing the development.  Each apartment is equipped with an emergency call system, providing peace of mind for the tenant as well as their family.

Retirees are increasingly seeking affordable age-appropriate apartments to rent in desirable locations close to amenities and transport. Renting allows individuals to downsize without the financial burden of homeownership while providing the freedom to relocate somewhere new.

For homeowners, it’s an opportunity to free up capital to spend in retirement. Given the growing number of people with insufficient pension savings[v], the trend to downsize from homeownership is likely to continue.

Additionally, rental properties in retirement communities come with amenities and services tailored to the needs of older adults, and most can be rented on assured ‘lifetime’ tenancies. For those already renting, these properties provide an opportunity to move out of the often insecure private rented sector (PRS) to a place where they never need to move again.

To conclude

At My Future Living, we are committed to providing affordable rental options in retirement developments that meet the needs of retirees, ensuring people can enjoy a comfortable lifestyle in later life.

As a sector we eagerly await the new government’s response to the Older People’s Housing Taskforce[vi], who submitted its report in May, hoping for policies that will support and accelerate the development of retirement housing.

With Matthew Pennycook becoming the new minister of state for housing, communities and local government, there is hope that building affordable age-appropriate housing will become a priority[vii].

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References

[i] https://content.knightfrank.com/research/2873/documents/en/uk-seniors-housing-market-update-q2-2024-11396.pdf

[ii] https://www.housingtoday.co.uk/news/proportion-of-older-people-living-in-prs-to-treble-by-2040-cache-report-finds/5130107.article

[iii] https://www.knightfrank.com/research/article/2024-03-21-unlocking-the-potential-for-seniors-housing-what-needs-to-change#:~:text=The%20UK’s%20population%20is%20rapidly,an%20additional%204%20million%20people.

[iv] https://www.gov.uk/government/news/our-plan-to-build-more-homes

[v] https://moneyweek.com/personal-finance/pensions/people-not-saving-enough-for-basic-retirement

[vi] https://www.gov.uk/government/groups/older-peoples-housing-taskforce

[vii] https://www.insidehousing.co.uk/insight/who-is-the-new-housing-minister-matthew-pennycook-87575