UK housing market needs to address needs of ageing population, says new report

Image The need for an increase in the supply of new housing across the UK is now recognised as a key social and political issue but it needs to include housing for a rapidly ageing populations, says a new report.

New home building needs to be widened with policymakers looking at how it can meet the needs of different buyers, especially older people, according to the latest Retirement Housing report from real estate firm Knight Frank.

It points out that the population in the UK is expected to increase by nearly 10 million over the next 25 years, taking the total number of people to 74.3 million by 2039 and says that a rapidly growing population has ramifications for an already stretched housing market in the UK.

But within this overarching challenge there is an issue which is becoming more pressing and that is providing housing suitable for an ageing population. Around 23% of the population are currently aged over 60. During the next 20 years this proportion will rise to 29%.

This will push the median age across the UK from 40 today to nearly 43 in 2039, by which time nearly one in 12 people will be aged 80 or over, according to forecasts from the Office for National Statistics.

In terms of housing, official data shows that households headed by older people account for nearly 30% of all dwellings. Of the projected increase in all households between 2012 and 2037, more than three quarters will be headed up by someone aged 65 or over, the report says.

It explains that a significant cohort of home owners do not want to move house in older age, and instead will make changes to their current home to accommodate changes in their lifestyle and health as time goes on.

‘However, there are also a notable proportion of older people who do envisage moving house or downsizing to a home that better suits their requirements. This may mean moving to a more manageable property and moving to be much closer to amenities in the centres of towns and cities,’ the report adds.

Specialist Knight Frank research shows that around 25% of those aged over 55 said they wanted to move into some sort of retirement housing in the future. This equates to around 2.5 million households.

Meanwhile, a recent snapshot of buying intentions across 1,500 UK households within Knight Frank’s House Price Sentiment Index, produced in conjunction with Markit Economics, showed that 29% of over 55s planned to buy a property at some point in the future, while 35% were undecided.

It adds that while some of these intentions may relate to investment property, the overall picture is one where the idea of downsizing is not being ruled out.

It also explains that the UK housing market currently has a significant supply shortage, but the scale of the undersupply in retirement housing is highlighted when we examine the pipeline of new housing being built. Only 3% of new housing which has been granted planning permission is specifically for ‘elderly’ or ‘sheltered’ accommodation.

Currently around 2% of housing stock is retirement housing according to research from the University of Reading. The current planning to development ratio suggests that around 5,500 retirement housing units are being delivered a year. In England alone, the number of households headed up by someone aged over 65 is set to increase by nearly 4 million over the next 20 years.

Once levels of home ownership and desire to move are taken into consideration, data suggests potential demand for around 30,000 retirement housing units a year.

‘There is a need for an increased awareness and a shift in stance from policymakers to deliver the tools to the market which will boost the delivery of suitable housing for the increasingly discerning yet undersupplied retirement market,’ said Emma Cleugh, head of Institutional Consultancy at Knight Frank.

‘So this is a call for the Government to deliver some tools to the market to facilitate an increase in the delivery of retirement housing which is so very much required, thus benefitting all areas of the housing market and the wider economy,’ she added.

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