Last week I had the opportunity to attend the Retirement and Later Life Living Development Conference in association with Built Environment Networking. My overall impression was that there are some exciting opportunities in the development of the later living sector, as well as a variety of challenges to be tackled – in short, an interesting , yet important area to be working in!
A few points have really stuck with me on reflection over the weekend, in particular:
- The overarching theme was one of supply and demand – by 2030, 2.1 billion people internationally will be aged over 60 years old, with the “baby boomer” generation soon reaching retirement age. The challenge now is to provide sufficient retirement living and caring options to accommodate everyone, with demand currently far outweighing supply in the UK. With the end users of retirement accommodation far from a homogenous group, the demand for a variety of different forms of accommodation and care is very strong.
- Given that the later living sector is a relatively nascent industry, one challenge experienced by operators is a lack of understanding. This, coupled with the fact that the planning system is old enough itself to live in a retirement scheme, makes for an interesting combination!
- There was a general feeling that the industry could benefit from a more holistic service from local planning authorities, complemented by further education amongst those making planning decisions at local level around the demand for more and diverse later living accommodation.
- Linked to this, the public perception of the retirement sector is also in need of an overhaul, with education again being a primary focus. Marketing of new developments looks to move the focus away from the traditional understanding of a care home to an attractive place to live which can offer a wide range of services at an affordable price, with the added benefit of appropriate levels of health support and care services being on hand as and when required.
- Sustainability was also mentioned many times throughout the conference – this is quickly moving from a “nice to have” to a fundamental requirement. Not only is it of concern to residents, but also to their families. Rising construction costs make retro-fitting existing units very expensive – in addition to the financial challenges facing developers buying land at ever-increasing prices and looking to build out new carbon-neutral retirement accommodation.
- A knock-on effect of these costs is affordability for the end user. A variety of potential solutions for this were discussed – including some form of shared ownership model being adopted by the private sector, and affordable renting options for a variety of incomes. What remains critical regardless of the structure of ownership, is that care services are provided as a “wrap around”, so that occupants benefit from the required level of support throughout their retirement.
Despite this financial challenge, one very positive take-away from the conference was the interest in later living as an investment project, with the Head of Retirement at Octopus Real Estate, emphasising that ESG is fundamental in their investment strategy.
Overall, some thought-provoking insights into what promises to be a rapidly changing sector with a lot of scope for further diversification and investment.
Retirement Living is one of the UK’s fastest growing sectors, and is predicted to be worth over £55 billion by 2023. It is also a sector going through major change and upheaval, where the needs and requirements of residents have changed massively over the last two years.
https://www.built-environment-networking.com/event/retirement-living-later-life-2022/