The number of specialist senior housing units is expected to grow by the almost 10% over the next five years, according to Knight Frank.
In its latest Seniors Housing Development report, the global property consultancy predicted the number of senior housing units to grow from 750,000 currently to 820,000 by 2025.
Lauren Harwood, an Associate in the Seniors Housing team at Knight Frank, said: “In response to an ageing demographic, the need for age appropriate housing has grown significantly. Ranging from standard housing through to aged care facilities, the offering of seniors housing in the UK has evolved markedly over the past decade and will continue to do so.”
Knight Frank predicted a substantial increase in schemes with varying levels of onsite care, as well as rental only options.
The global property consultancy said the increase in delivery was being fuelled by the inflow of new investment and growth in new operating platforms.
Around £450m of capital has been invested in the sector already this year and Knight Frank has identified an additional £1.3bn due to be committed.
Investment has been strong during the first half of and this is expected to continue for the remainder of the year. Total investment is expected to exceed last year’s levels, the consultancy said.
Annual delivery has risen from a previous historic average of 6,690 units per year (2011-2015) to 8,293 per year (2016-2020). Knight Frank predicted that annual delivery will increase further – reaching 14,000 units per year by 2025.
Lauren added: “In response to an ageing demographic, the need for age appropriate housing has grown significantly. Ranging from standard housing through to aged care facilities, the offering of seniors housing in the UK has evolved markedly over the past decade and will continue to do so.”
Knight Frank said the future pipeline of projects indicated a shift towards more choice for residents, including mixed-tenure and rental-only options and more schemes with varying facilities and services. Housing with care schemes account for 57% of the identified pipeline, with nearly 18,000 units either under construction or with planning submitted or granted. There are just over 13,200 retirement housing units in the development pipeline.
The consultancy forecast the number of private senior living rental properties in the UK will increase by 166% in next five years, from almost 5,000 currently to more than 12,000 by 2025.
Growth will be driven by a rise in the number of housing with care operators allocating a proportion of their pipeline to the rental market. Even accounting for such rapid growth, senior housing rental stock will only account for 5% of the total number of private senior housing units, however, which is currently dominated by ‘for sale’ stock, Knight Frank said.
The rate of delivery is dwarfed by the UK’s aging population, however. Over the last five years, 41,464 new seniors housing units have been built, whilst the population of 75 year olds in the UK has risen by more than 550,000.
Lauren noted: “It’s clear that a step change in new delivery is required if this huge imbalance between need and supply is to be reversed.”
Planning was also highlighted as a key barrier for increasing the delivery of seniors housing in England, with the vast majority of councils across England underprepared to provide suitable housing for seniors.
In 2020, Knight Frank’s analysis in partnership with Irwin Mitchell suggested that more than half of the local authorities in England do not have clear planning policies in place to support housing for seniors.
Tom Scaife, Head of Seniors Housing at Knight Frank, (pictured) commented: “Properly incorporating and planning for senior living will reap huge socioeconomic benefits for local authorities, developers, residents and the wider community.
“Financial savings to local authority care services; release of local family housing back to the market via downsizing; local employment generation; reduced impact on highways and other local services; a post COVID-19 rejuvenation of high streets; and contribution to housing supply targets are all significant reasons why we need increased delivery.
“Seniors housing can also help prevent loneliness and isolation in older age, and help facilitate positive mental health and general wellbeing.
“There is a need for authorities, developers and communities to adequately plan for housing across age brackets to meet the needs of their communities. Having a proper policy framework, housing targets and separate use class for seniors housing should be a requirement rather than an expectation.”