48 JT234
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hospitals, care facilities & retirement living
For lenders, the lack of robust resale data and uncertain time-to- sale remain key concerns, making it difficult to structure financing confidently. Nevertheless, the industry is slowly responding to these challenges. Some developers have introduced exit fees as a means to keep annual service charges lower, effectively spreading lifetime costs more evenly. Others are expanding rental options, allowing residents to ‘pay as they go’ rather than buying a niche asset they may later struggle to sell. However, these rental prices are typically high – a shock for many retirees unaccustomed to current market rents, having paid off their mortgages decades earlier. For the model to appeal widely, these schemes need to be restructured in ways that provide security of tenure while avoiding unsustainable rent inflation. Meanwhile, changes to planning policy are removing some of the limited development advantages that previously existed. C2 classifications have historically provided exemptions from affordable housing contributions, supporting viability for specialist retirement schemes. The erosion of these benefits is making the economics of development less attractive. Combined with poor publicity, opaque legal models, and limited specialist financing options, developers have little incentive to enter or scale up in the sector. There are, however, reasons for cautious optimism. Demographic
pressures are forcing policy conversations to accelerate, and institutional investors are increasingly drawn to long-term demographic plays, particularly those with inflation-linked cashflows and strong ESG credentials. Countries like Australia and
New Zealand have shown that when
underpinned by clear regulation, transparent consumer protections, and viable financing models, later life living can thrive as a commercial sector while delivering significant societal benefits. For the later living model to work in the UK, a fundamental shift is needed. Financing must adapt, backed by clearer data on resale performance, exit fees, and time to sale. Planning frameworks should recognise later life communities as distinct from both traditional housing and care homes, providing clarity and certainty for developers and investors alike. Consumer protections must be reformed to rebuild public trust, ensuring residents and their families are not left with unforeseen financial liabilities. Without such structural changes, later life living risks remaining a missed opportunity: for investors seeking resilient long-term returns, for older generations in need of appropriate housing, and for a country urgently trying to unlock more family homes to ease its deepening housing crisis. With demographic realities becoming impossible to ignore, the sector stands at a turning point, if policymakers, investors, and developers are ready to act.
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to work in the UK, financing must adapt, backed by clearer data on resale performance, exit fees, and time to sale...
Daniel Austin
For the later living model
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