Is the surge in new build retirement homes just the tip of the iceberg?
Posted 30 September 2015 by Keith Osborne
UK Older People's Day takes place tomorrow (1 October), coinciding with the UN International Day of Older Persons.
These days, retirement is very much seen as the start of a new phase of life, and more and more people in this position are buying new homes aimed specifically at retirees.
The sector is growing: the National House Building Council (NHBC) reported that in the first half of 2015, 2,337 new retirement homes were registered, compared with 1,919 in the whole of 2014. However, these numbers are tiny compared to the potential audience. A recent report from charity Age UK revealed there are 9.3million British households headed by a person over retirement age, about one-third of all households, and that figure is set to rise to 13million by 2033.
The report goes on to cite findings from a 2012 study by the Joseph Rowntree Foundation which compared the number of purpose-built retirement properties (about 2% of the entire stock, or 533,000 homes) with the number of older people who would be interested in buying one – one-in-four over-60s, or 3.5million people! According to new research by Prudential, 37% of homeowners over the age of 55 are planning at least one more property purchase in their lives.
These figures suggest there is a huge untapped market and there are so many good reasons for older people to consider a new retirement home that that number may be an underestimate. New build retirement homes are built to specifications to suit older people (for example, with easy to access kitchen appliances and electrical sockets), they require little or no maintenance and are very energy efficient, and therefore cheap to run – great for those on a fixed income.
In addition, a new retirement home development provides the security of homeownership and having like-minded neighbours close at hand with the peace of mind, in most developments, of having emergency care on site or easily contactable.
Many older homeowners see the benefit of downsizing from a property that has become too large for their needs to a smaller new home. The Prudential’s research shows that this is the biggest motivation for over-55s planning a property deal, with 43% of those asked saying this was their primary reason for moving.
Increasingly, there is a huge ‘lifestyle’ element to making a move to such a development. There are usually some communal facilities for residents to enjoy: these may be as simple as a coffee lounge or garden, but some of the more luxurious new retirement developments have pools, gyms and spa treatment rooms which would not be out of place at a top hotel.
The lifestyle implications extend further than that. Moving to a new retirement home gives the buyer an opportunity to relocate. The coast and countryside have always been popular places to retire too, and a Prudential report in July noted these kinds of location as having the best wellbeing factors for older people, based on estimated longevity, low crime rates and higher per capita healthcare professionals. Devon, Dorset and Powys topped their poll.
Some people of retirement age will use the opportunity to move to a new build retirement property closer to their children and grandchildren. Research from specialist developer McCarthy & Stone showed 68% of people over 65 wanted to live in close proximity to their family.
A proportion of retirees will spend periods overseas and many new build retirement developments are well-suited to this ‘lock-up-and-leave’ way of life, where a concierge or manager can keep an eye on the UK property while the owners are enjoying life at their other home.