We need to build retirement communities into which people actually want to move.
Tony Ward is chief executive of Clayton Euro Risk
Last week, Britain’s biggest retirement house builder McCarthy & Stone urged the government to do more to help the retirement industry on housing.
The suggestion made by CEO Clive Fenton was that the government should relieve older customers of stamp duty in order to increase supply in the housing market. He said: “…by helping the retirement industry, you [the government] are indirectly helping first-time buyers because everyone who buys one of our properties frees up a house for a family or a first-time buyer so it seems a no-brainer.”
The group has a 70% share of the country’s retirement housing market so, although there may be some vested interest at work here, I think their suggestion merits serious consideration. Mick Maddock, McCarthy & Stone’s chief financial officer said: “The reality is the market is supply-constrained not demand-constrained. There have only ever been 141,000 retirement properties built and we’ve built around half of them. There is a massive structural imbalance, which nobody has attempted to attack full-scale.”
In my blog in January, I suggested that building new homes is just part of what’s needed.
Too great a focus on housebuilding overlooks a potentially bigger source of supply in the form of existing homes. Research has suggested that one-third of households have two or more spare bedrooms. I said that allocating housing more efficiently and encouraging elderly couples to downsize would free up some 16m or so spare rooms. If all 3.3m over-55s looking to downsize could find suitable homes, this would unlock some 18% of the country’s property market, worth £820 billion. I questioned what incentives were out there were for making downsizing a realistic and cost effective option for the over-55s.
Against this background, McCarthy & Stone’s suggestion makes a lot of sense. If we reduce the cost of downsizing for the older generation, thus making it appealing for them to do so, more will inevitably take the plunge. But that’s just part of it. Notably, only 1% of people in the UK live in retirement communities, compared with 17% in the US and 13% in Australia and New Zealand.
We need to build retirement communities into which people actually want to move – homes that reflect changing needs and expectations for the older generation. According to the Office for National Statistics, 60% of all housing transactions in the next 20 years will be initiated byover-60s.
I make no apologies for repeating myself. We need some thoughtful, holistic planning that takes into account changing demographics in our community.
