Investment
Retirement real estate: a sector worth reinventing
Kevin Beirne, head of retirement living at Octopus Real Estate, reflects on why the development of retirement communities represents a growing opportunity for investors
A few years ago, Robert De Niro starred in a comedy called The Intern. The premise of the film was simple: De Niro’s character was a 70-year-old widowed retiree who re-entered the workforce to work for a fashion e-commerce start up. Amid the entertainment of a revered actor like De Niro serving his new boss - a 30-something fashion entrepreneur played by Anne Hathaway – coffee, and learning to work without the Yellow Pages, the movie offered a refreshing antidote to the conventional wisdom that retirement means adjourning one’s career and picking up crosswords. For me, as well as being a light-hearted,
feelgood film, it signified a bigger issue about the widespread, and misplaced, conventional wisdom that often besets the world of retirement. There are many commonly held notions that are standing in the way of a successful future for the retired generations, and retirement real estate is one such area that is rife with misconceptions. Throughout this piece, I hope to shine a light on some alternative thinking that might reimagine what real estate looks like for retirees.
A housing crisis, but for whom? When people discuss the UK’s housing crisis at dinner parties, or when it features in national broadsheets, it is almost universally centred on record high house
prices and the inability of ‘Generation Rent’ to get on the property ladder. Stories abound of the millennials who can barely afford to buy without help from the Bank of Mum and Dad, or the young families priced out of good school zones. But these stories neglect the very real housing crisis that retired people face. It is not just the younger generations suffering from a chronic undersupply of homes – as many as three million people receiving a pension would like to downsize and move into more suitable accommodation for their age and lifestyle but cannot do so because of the lack of appropriate housing. A survey of older people conducted by the Associated Retirement Community Operators (ARCO) in collaboration with Later Life Ambition in 2020 found that while 70 per cent would be interested in moving to somewhere with support as an alternative to a care home, 53 per cent said their local area did not have good enough downsizing options. Without suitable or desirable accommodation for retirees to move
It is abundantly clear that we must align housing supply with actual population needs by providing better living options for those of retirement age
March 2023
www.thecarehomeenvironment.com
into, these older people stay put in the family homes they feel comfortable in, blocking the property ladder for second and third steppers and, in turn, restricting opportunities for young families and first-time buyers. Nearly 60 per cent of all surplus bedrooms in the UK can be found in homes owned by over-65s. Meanwhile, each year, only 7,000 new homes are delivered for the elderly. It is important for retirees to find properties that can offer services and facilities to maintain or improve their standard of living, but the majority of new build homes are targeted towards first-time buyers and are thus modest-sized flats or houses that are not suitable for older buyers. By any measure, this makes older buyers the most under-supplied area of the UK’s housing market. With people living longer than ever and the proportion of older people only increasing each year, this problem is set to get larger and larger.
The UK’s housing crisis requires a more sophisticated approach than simply building more homes and incentivising first time buyers. It is abundantly clear that we must align housing supply with actual population needs by providing better living options for those of retirement age. Establishing a housing market that works
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