Let's get Britain building

There are perhaps not too many areas where the CBI, the Ready for Ageing Alliance, housebuilders and the Labour, Liberal Democrats and the Conservatives all agree.

But one of them is that we need to build more homes.

ILC-UK’s own analysis has revealed, for example, that just to keep up with demographic change, we need new homes built at the fastest rate since the 1970s.  

Some of these homes will need to be retirement homes. A new study published this month by Knight Frank has highlighted a “chronic shortage” of retirement homes. The organisation, which surveyed people over 55, found that 25% (4.4 million) would buy or rent in a retirement village.

In 2011 Professor Ball said that the UK has capacity to get to 16k units a year for owner-occupied retirement housing. In 2013 Demos argued that around 1 in 4 of the over 60s would consider retirement housing (similar to the Knight Frank percentage).

In the UK, just around 1% of us live in retirement housing. This compares with 17% in the US and 13% in Austria. Even if Knight Frank and others have overestimated demand, it is clear there is likely to be a shortage of new retirement housing.

So why isn’t it happening?. The recession has had a negative impact. There was not enough money around to build and not enough demand as inertia and other barriers prevented older people making the move. Planning remains a barrier.

But perhaps things are about to change? Glenigan have found for example that the number of retirement housing units awaiting planning consent is more than double the number currently being built. This either reflects an imminent increase in new schemes or a slow planning process. Possibly both.

McCarthy and Stone have recently announced plans to reach 3,000 units a year by 2018, having sold 1,667 in the year up to 31 August 2014.

EAC and McCarthy and Stone have provided ILC-UK with new data on the number of retirement housing schemes (1) completed since 2005. These figures reveal a fall up to 2010 and a subsequent increase. The total number of new properties remains a long way off the 2007 figure.

Units (properties) update October 2014
Year completed	McCarthy and Stone	All	%
2005	1747	2708	65%
2006	2296	4152	55%
2007	2205	4542	49%
2008	2452	4249	58%
2009	870	2417	36%
2010	491	1160	42%
2011	892	1745	51%
2012	1166	2376	49%
2013	2071	2938	70%

It’s nice to see industry, charities, thinktanks and the three largest (2) political parties all agreeing. But whilst there is a consensus about need, making it happen seems a harder. Whilst the political parties advocate nationally, local MPs and Counsellors find reasons to object to housing. There is always somewhere better to put it (ideally someone else’s constituency).

And whilst the signs might look good, we have only built 200,000 homes in 4 out of the last 14 years. As our analysis showed, 200,000 is just enough to keep up with demographic change rather than address the current shortage. Even if we were to build 200,000, how do we increase the proportion of retirement housing as part of these numbers?

If we are to ensure the supply meets expectations, new housing (retirement and general needs) must be built according to the needs of an ageing society. We need lifetime homes standards, not a nonsense of “optional” age friendly standards for housing. If we don’t build the right homes, there will be limited incentive for older people to choose to rightsize and potentially free up bigger family homes.

Let’s get building. But let’s also build good stuff.

David Sinclair

Thanks to EAC and McCarthy and Stone for providing the new data.

1) UK numbers only include schemes that are staffed by something approximating to a traditional scheme/court manager. They therefore exclude developments that are simply age exclusive by virtue of planning consent. They are captured by year of completion, ie when people start to move in. The numbers includes schemes whose primary tenure is leasehold / freehold and the Scottish equivalent. There is likely to be some undercounting of (largely housing association) mixed tenure provision. EAC allocate all properties in a scheme to its dominant tenure.

2) In terms of Westminster Parliamentary seats