More Retirement Housing will save social care £2.6 billion a year

20 June 2017

Ahead of Wednesday’s Queen’s Speech and forthcoming Social Care Green Paper, McCarthy & Stone show more retirement housing would save £2.6 billion a year in health and social care costs 

- McCarthy & Stone believes the Government’s Social Care Green Paper needs to set out long term solutions, including more retirement housing

- The abandonment of Conservative manifesto proposals makes creative thinking crucial

- Government figures show annual health and social care savings could reach £2.6bn a year from more retirement housing, equal to 20% of adult social care spending 

- Calls for a focus on planning reforms and a ‘Help to Move’ package for older people, including a stamp duty exemption when downsizing 

Clive Fenton, Chief Executive of McCarthy & Stone, the UK’s leading retirement housebuilder, has welcomed the Government’s determination to fix social care.  While reforms in the Conservative Manifesto are now expected to be abandoned, he has urged Government to focus on the supply of retirement housing to help achieve a potential £2.6 billion annual saving.  As 74% of all household growth to 2039 will be by those in later life, McCarthy & Stone agrees the Government is right to focus on this issue now (1).

Noting a Government study that found the typical person aged 60 or over moving to a suitable retirement development saved £3,525 a year in health and social care costs (2), Clive Fenton has argued that an increase in the number of retirement properties of 500,000, or just 2% of the households in the UK over the next two decades, would lead to savings of £2.6 billion a year (3).  This saving equals around 20% of the cost of adult social care (4).

McCarthy & Stone welcomes both the existing moves to ensure a greater focus on older people’s housing, as set out in the recent Housing White Paper and will be writing to key officials and Ministers ahead of the forthcoming Social Care Green Paper and Queen’s speech. Clive Fenton commented: 

“The Government’s focus on the urgent need to fix the social care system is absolutely right.  Increasing the supply of retirement housing could save billions for the NHS and adult social care services.  As the Government considers the next steps for social care, they need to consider all elements – ditching the Manifesto proposals makes wider creative thinking all the more important.

“Retirement accommodation is designed around older people’s needs, and includes private apartments, on-site support services, and large shared areas.  It provides people with the independence they seek in later life while being safe in the knowledge that support is on hand should it be needed.  It also helps address the issue of loneliness for many older residents, as research has concluded that loneliness and social isolation is as big a killer as obesity and as dangerous to health as smoking 15 cigarettes a day. 

“This makes retirement housing a perfect choice between existing housing that is hard to maintain and expensive full time residential care, which many older voters and their families do not want. The more that Government supports retirement housing as a key part of the long term solution to social care, the lower the costs of social care.” 

Currently, social-rented retirement and sheltered housing is subsidised by Government by £40,000 per unit (5).  Yet private retirement owner-occupier housing, which costs the Treasury nothing, and is what over 80% of older people say they want, is neglected (6).   McCarthy & Stone believes this is a missed opportunity.  There are a wide range of options for Government to increase the numbers of retirement developments:

Adopting a formal housing and planning policy presumption in favour of more retirement properties where the council is not building enough retirement schemes. 

Allocating more land to retirement housing providers across all tenures.

Allowing local authorities that support retirement housing to reduce the need for building land-intensive family homes elsewhere (retirement housing typically releases larger homes back onto the market, in addition to new build retirement property – a two for one benefit). 

Ensuring that local authorities understand and take account of health and social care savings from retirement housing and reducing development taxes such as Section 106 or CIL to reflect these benefits.  

Creating a ‘Help-to-Move’ package where those who are downsizing receive a stamp duty land tax rebate to help them pay for the costs of moving. This would help get the market moving and would pay for itself via the additional moves created. 

Retirement housing costs more to build than mainstream housing as it has large communal areas, lifts, facilities and accessible layouts designed for wheelchairs and easy mobility. Despite these higher costs, retirement developers are often burdened by having to pay just as much as a typical developer in terms of infrastructure and affordable housing, which makes many sites unaffordable.  The health benefits that cost money to incorporate into retirement schemes are not taken account of by the current system. 

Such a push on social care would also help increase the levels of housing supply at no extra cost. At present, supply of retirement housing is running at fewer than 5,000 units a year, despite the fact market analysts such as Knight Frank think there is demand for 25,000 to 30,000 units a year if sufficient land was made available (7).

The call for greater diversity in the housing market through more retirement housing was echoed by Stewart Baseley, Executive Chairman of the Home Builders Federation, who noted the benefits of retirement housing in terms of health and social care:

“Whilst significant progress has been made to bring about the huge increases in output we have seen over the last three years, we are still well short of delivering the number of homes required. The new government needs to continue to develop the policy framework that allows more new, high quality homes to be delivered.  Moves by politicians to help diversify the housing sector, including by helping build more retirement housing, will further increase overall supply, help free up larger family homes and alleviate pressures on local social care and health services.”   

Respected Crossbench peer Lord Best, who has a long and distinguished career in the housing sector and is Co-Chair of the All Party Parliamentary Group on Housing and Care for Older People has backed the call for greater political commitment to retirement housing, including a ‘Help to Move’ package: 

“Downsizing to retirement housing can help everyone for whom a bigger house and garden is becoming a burden. It can prevent the need for a later move into residential care.  And it triggers whole chains of home moves that benefit younger families, generating Stamp Duty revenue that could more than pay for ‘Help to Move’ concessions.”

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For more information, please contact Sara Price at or via 0207 096 7733/ 07961801204. 

Notes to Editors

About McCarthy & Stone 

McCarthy & Stone is the UK’s leading retirement housebuilder with a c.70% share of the owner-occupied market (8). The Group has sold over 51,000 properties across more than 1,100 retirement developments since 1977 and is renowned for its focus on the needs of those in later life.  It re-joined the Main Market of the London Stock Exchange in November 2015 and re-entered the FTSE 250 following its quarterly review on 21 March 2016.  There is growing demand for specialist retirement housing, with the number of people aged 85 and over in the UK expected to more than double between 2015 and 2035 from 1.5 million to 3.2 million, and the number of people aged 65 and over expected to increase by more than 50% from 11.6 million to 17.2 million (9).  According to research by Demos, 1 in 4 over 60s are interested in retirement living (10), yet only c.141, 000 units of specialist retirement housing for homeowners have been built (11).  

The Group has two established product ranges – Living and Retirement Living Plus (formerly known as Assisted Living) – which provide one and two bedroom apartments across the country with varying levels of support and care for older homeowners.  In late 2014, McCarthy & Stone launched its Lifestyle Living (formerly Ortus Homes) product, which is exclusively for the over 55s and those in the earlier stages of retirement who are seeking to downsize for their leisure years.  McCarthy & Stone is currently selling apartments in this product range across nine locations, helping the Group to capture a wider share of the active retiree market. 

The first Lifestyle Living development at Scarlet Oak in Solihull won the Best Retirement Scheme at the annual Housebuilder Awards in November 2015.  At the same awards in November 2016, we were pleased to again receive Best Retirement Scheme for Ramsay Grange and Lyle Court, our combined Retirement Living Plus and Lifestyle Living development in Barnton, Edinburgh, as well as Best Customer Satisfaction Initiative for our approach to ensuring that we deliver a Five Star service for our homeowners. 

McCarthy & Stone’s commitment to quality and customer service continues to be recognised by homeowners.  In March 2017, the Group received the full Five Star rating for customer satisfaction from the House Builders Federation (‘HBF’) for the twelfth consecutive year – making it the only UK housebuilder, of any size or type, to achieve this accolade. 

(1) DCLG, 2014-based National Housing Projections, England, 2014-2039 (2016)
(2) Financial benefits of investment in specialist housing for vulnerable and older people, HCA, 2010 figure updated for 2010-17 using CPI inflation to reach £3,525 a year
(3) This is the £3,525 savings a year figure multiplied by 500,000 (the number of homes we think that could be delivered over the next couple of decades) and then 1.5 people living in each retirement apartment 
(4) The State of health care and adult social care in 2015/6, Care Quality Commission, 2016 report shows that adult social care spending by local authorities consisted of £13.8 billion. 
(5) See for example Phase 2 of the Care and Support Specialised Housing Fund: phase 2 successful bids, March 16 2016, DCLG
(6) Press releaseHome Ownership or Bust, CML, 2016
(7) Retirement Housing, Knight Frank, 2016
(8) Based on 3,453 registrations of cross-tenure properties specifically designed for the elderly with the NHBC during calendar year 2015, of which 2,672 were registered by McCarthy & Stone
(9) Population projections by the Office for National Statistics (2014 based)
(10) Demos – Top of the Ladder (September 2013)
(11) Independent data provided by Elderly Accommodation Counsel (April 2016)


[1] DCLG, 2014-based National Housing Projections, England, 2014-2039 (2016)