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New research: housing crisis looms for Britain's ageing population

Policy makers must act now if they are to avoid a growing crisis in the provision of housing for older people, according to a major new report published this week by Henley Business School at the University of Reading.

Housing markets and independence in old age: expanding the opportunities highlights that there are only 100,000 specialist private retirement homes in the UK. Yet by 2033, there will be an extra 3.5 million households aged over 65 years, a 60% increase on today. Without suitable and affordable accommodation, these demographic changes could result in significant housing problems for the elderly. 

Author Professor Michael Ball, of Henley Business School, says that private retirement accommodation, referred to in the report as owner occupied retirement housing (OORH), can address this problem. OORH is a form of retirement accommodation designed specifically with older people in mind and purchased on a leasehold basis, which has high levels of consumer satisfaction. OORH can also help reduce public expenditure, particularly health costs, and provide wider benefits to society.

However, the report notes that due to policy restrictions surrounding housing and planning, the supply of OORH does not meet present or growing demand. Build rates are low and need to grow four times from that achieved before the 2007/8 downturn to cope with just a moderate increase in demand. 

The report states that the primary reason for the limited supply of OORH is ‘strategic neglect' by policy makers, with public policy directly responsible. The report notes that a large number of planning applications by developers for OORH are refused by local authorities who fail to understand its benefits. Lack of government guidance also means that there is no stimulus for councils to start thinking properly about this sector. There are also difficulties associated with the specialised nature of OORH, including land taxation in the form of affordable housing and increased building costs not incurred by more traditional house builders. These difficulties could be addressed with simple supply-side inducements. 

The report highlights a number of simple policy changes to stimulate the delivery of OORH, including:

  • More national strategic guidance on housing for the elderly.  The forthcoming National Planning Policy Framework offers such an avenue, but only if the Government seizes this opportunity by providing a set of ground rules for the delivery of more suitable accommodation to cut through local bureaucracy. 
  • Treat OORH as a form of affordable housing.  Developers of OORH are currently required to provide affordable housing contributions, which are often allocated for housing younger people, to the neglect of the elderly.  This skews the benefits of affordable housing away from the elderly. Treating OORH as a form of affordable housing because of its significant personal and community benefits would help reduce price and increase availability.  
  • Better understanding among local councils of the benefits of OORH.  This includes the allocation of sites for OORH in their local plans and references to the benefits of this type of accommodation in local housing strategies. 

Professor Ball said: "Britain's population is ageing, but its housing options are shrinking.  Many older people wish to downsize because their garden or home become too difficult to maintain, or because of the loss of a loved one. But the limited supply of the right type of retirement accommodation means there are few alternatives, and what is available can be expensive because supply and land costs are so high.

"Without the right policies in place, these problems will only grow as our population ages.  The solution is simple: changes to public policy will allow private market developers to increase supply without any contribution from the public purse. It's vital that we get these housing policies in place now."

The research also highlighted that there were significant benefits to OORH beyond providing more accommodation for a burgeoning older population. The report notes that 92% of OORH residents are very happy or contented and most would recommend their accommodation to others. As OORH accommodation is designed for impaired mobility, residents can manage better and spend fewer nights in hospital. On moving, most residents free up a substantial family home, with two thirds moving from homes with three or more bedrooms. This boosts local housing markets - for every 5,000 OORH sold, property to the value of £1.1 billion is released into local housing markets. The turnover of this type of housing is essential for a healthy housing market.

Professor Ball added: "Taking a positive view of this type of accommodation fits perfectly with the localism agenda and the government's Plan for Growth. The direct benefits for older people and their communities are clear and there is also the potential for reduced public expenditure, for instance on care and health services. Increasing supply of this type of housing is a socially responsible action and hopefully these recommendations will be received positively by policy makers."

These recommendations and many others will be highlighted at the launch of the report in the Houses of Parliament on 9 May.  Guest speakers include Bob Neil MP, Minister for Planning, Sarah Newton, MP for Falmouth and Truro and a former Director of Age UK and the International Longevity Centre, and Kate Henderson, Chief Executive of the Town and Country Planning Association. 

The independent report was sponsored by retirement property developers McCarthy & Stone Retirement Lifestyles Limited.

ENDS

For more information, please contact Rona Cheeseman, press officer at the University of Reading on 0118 378 7388 or email [email protected]

 Notes to editors

 The report, Housing markets and independence in old age: expanding the opportunities, can be viewed at http://tinyurl.com/HousinginOldAge

 The report was published on 9 May by Professor Michael Ball of Henley Business School at the University of Reading. The report includes survey results from face-to-face and telephone interviews with 345 residents aged 65 to 90 in 44 recently-built McCarthy & Stone developments throughout the UK between October 2010 and February 2011. Further data was also supplied through reviewing the records of 5,000 sales of McCarthy & Stone apartments. 

Owner occupied retirement housing (OORH) is a form of specialist accommodation associated with a greater degree of independence for those in later life. Properties are privately owned, have their own front doors and are associated with various levels of support. This support ranges from the provision of communal facilities, offering an ability to meet and socialise with other residents, the presence of the house manager for at least part of the day, and, possibly, the preparation of meals and a dining room, through to more intensive assistance with extra care on a 24-hour basis. There are currently around 560,000 specialist independent living dwellings for the elderly in England, but less than 20% of the accommodation is private and most of that relates to OORH or to a small number of ‘extra-care' properties with a greater care offer.

McCarthy & Stone is the market leader in retirement living, having delivered more than 40,000 such dwellings and currently has 150 development schemes across the UK, either selling now or in the pipeline. With over 30 years' experience, it offers a range of award-winning one and two bedroom apartments exclusively for the over-60s. For further information, visit www.mccarthyandstone.co.uk

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