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Retirement housing potential needs unlocking Government has the key

Prime Minister Liz Truss must make housing for those in later life a priority, and her new government must finally launch the long-awaited task force on older people’s housing. With the right backing and direction, it can breathe new life into a sector ripe for growth.

John Tonkiss
News and community
Posted 17 October 2022
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7th September 2022

Retirement housing’s potential needs unlocking – Government has the key

John Tonkiss, Chief Executive Officer of McCarthy Stone

John Tonkiss

Prime Minister Liz Truss must make housing for those in later life a priority, and her new government must finally launch the long-awaited task force on older people’s housing. With the right backing and direction, it can breathe new life into a sector ripe for growth.

Retirement housing makes an enormous difference to the lives of older people across the country. It helps residents stay happier and healthier for longer, enabling them to maintain their independence, find a community and make new friendships.

It also unlocks the housing market by releasing larger homes at the top of the ladder, and keeps residents away from public health and care services. On top of that, it can deliver economic investment and growth, particularly in our ailing town centres.

Yet millions of older people are currently unable to move from their existing homes into something better suited to their evolving needs. At present, c.7,000 new retirement housing units are delivered annually, compared with demand for 30,000. We need greater policy support to help address years of undersupply in the retirement community sector.

The UK is facing a housing crisis and, given our ageing population, more and more older people are acutely effected. The 2021 Census data has shown that 18.6% of the UK population is now over 65, compared to 16.4% in 2011. This is a population of nearly 13 million older people that is expected to grow by a further five million in the next 20 years.

We want to address this challenge by expanding the retirement housing sector so more people can access the benefits of this form of living. But the sector faces various challenges that limits its growth, including planning, affordability, stamp duty and a lack of incentives to help older people move.

The Government promised to launch a task force on older people’s housing in its Levelling Up White Paper to overcome these barriers, and we are hugely supportive. However, its launch has been much-delayed, and is now delayed further given recent political events. It needs to become a priority for the new Prime Minister.

A key issue the task force can address is the need to create a more supportive planning environment. Delays and uncertainty in the current system exacerbate the shortfall that already exists.

Nationally, it is taking councils an average of 41 weeks to reach a decision on our applications. It is difficult for our sector to expand and make investment decisions in this environment. A stronger NPPF would help speed up this process.

A report by Knight Frank in July 2022 notes that more than a third of local plans currently make no provision for either policies or site allocations for older people’s housing, so the current system is failing. A revised NPPF should include clear requirements for local authorities to calculate and meet the need for older people’s housing in their local areas, with the requirement that planning authorities should undertake comprehensive housing needs assessments for older people across all types and tenures.
They should plan for this form of housing in their local plans, and then monitor delivery against set targets. The NPPF should also include exemption for retirement housing from affordable housing and CIL requirements to resolve existing viability restraints.

We are delighted to be working with Homes England as a strategic partner to address some of these issues already but we believe there is the potential for the agency to play a much greater role in the future. Improving Homes England’s Older Person’s Shared Ownership (OPSO) scheme would involve a small number of minor changes to improve viability, creating a scheme which would be more attractive to retirement developers and investors. In total, we would like to see 10% of Homes England’s housing delivery to be homes for older people.

We know from the recent Levelling Up, Housing and Communities Committee report into the long-term funding of adult social care that MPs support our aims and we want to work with government and Homes England to create a policy environment that encourages investment in the sector to allow us to deliver the socio-economic benefits of retirement housing at scale.

We also feel that stamp duty could be reformed, potentially seeing older people who move into a retirement community exempted from paying the tax.

Finally, we would also like to see greater clarity over the future commercial model for charging for services within retirement communities, alongside greater consumer protection. We also believe there is potential to create a new tenure that becomes a viable alternative to leasehold that works specifically for the service-based model of retirement communities.

The taskforce can bring these issues together and create a new framework for developing and operating retirement communities. The next government should act quickly.

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