The UK has an ageing population. The rate of demographic change is both dramatic and accelerating. In 2023, around 11m people in England were aged over 65. The Office for National Statistics projects that by 2043 the figure will have increased by 30.5%, with the over-65 age cohort growing at three times the pace of the national average. Yet, while these demographic trends have been clear for almost a decade, we have struggled to prepare for them.
Working with Knight Frank, we have been tracking the rate at which local planning authorities in England plan for senior housing. The first survey was conducted in 2017. At that point only 9.7% of English LPAs had both a clear planning policy addressing the need for senior housing and a specific site allocated for development. By 2020, that percentage had increased to 18.6%. In 2022, the percentage of English LPAs with both planning policies and allocations in place had increased to 23.3%.
The 2024 iteration of the report was published on 21 March 2024, and over the past two years, this trend of slow but steady progress has come to a halt. At a local plan level, there has been no statistically significant progress in the number of “top-tier” LPAs, which still stands at 23%.
Change afoot
Despite this, it seems senior housing is at an inflection point. While progress at local planning policy level may have stalled, the national picture looks very different. The government finally seems to have woken up to the role that senior housing can have in addressing our housing crisis and the (separate but related) crisis engulfing social care. After much lobbying, the Older People’s Housing Taskforce was set up last year, to look at how to grow the sector. This cross-party, interdepartmental task force is due to publish recommendations in late May, and looks to have buy-in from a range of stakeholders, including politicians from both sides of the political divide.
Among changes made to the National Planning Policy Framework in December 2023, were some designed to support the provision of senior housing and ensure that LPAs properly assessed the need for it when preparing their local plans. The impact of these changes is already starting to be felt.
In February, the planning inspectorate granted permission for an integrated retirement community in Bottisham. The appeal decision is one of the first released since the revised NPPF was published and the impact of the changes can be seen in the inspector’s conclusions. Not least, the finding that the need for each type of senior housing, including sheltered accommodation and care homes, should be assessed separately.
There are also some helpful legislative changes on the horizon. The Levelling-up and Regeneration Act 2023 contains some provisions which, once in effect, could assist the expansion of the sector. The 2023 Act introduces national development management policies into the English planning system. NDMPs are set nationally and sit alongside an LPA’s local plan. Crucially, an NDMP has the same status in law as the local plan itself and, in the event of a conflict, the NDMP would take precedence.
A properly worded NDMP focused on senior housing would standardise the planning policy approach to the sector across England, simplifying things for operators looking to bring forward new schemes. The 2023 Act also contains a new legal duty on the secretary of state to provide detailed guidance on how LPAs should assess the housing needs of the elderly population when preparing their local plans, which has yet to be enacted. This would also be extremely helpful in standardising the approach taken by LPAs across England.
Policy to practice
This increasingly supportive national policy environment will be beneficial to a sector that can currently only meet a tiny proportion of need. While delivery of new senior housing developments is increasing (in 2023, more than 9,140 new senior housing units were built, an increase of 19% from the previous year), it still falls far short of the 50,000 units a year called for by the Mayhew Review.
In response to the increasing diversity of our ageing population, the types of senior housing being delivered is also becoming more diverse. In our joint report, Oliver Knight of Knight Frank notes a trend towards larger developments, for example, typically an integrated retirement community or retirement housing scheme with 60-200 flats. The planning pipeline suggests this will continue. There are 115 schemes with 100-plus flats in the planning pipeline, compared with 255 currently operational; the majority of which are social housing and built pre-1980. There is also increasing development activity in urban locations.
The data also points to a further increase in the provision of age-targeted rental product and shared ownership, as investors and operators look to offer seniors the broadest choice possible. Delivery of rental product is expected to increase further in the coming years, with analysis of the pipeline suggesting total private rental units will nearly double to just shy of 10,000 by 2027.
The appetite from new and existing market players to deliver more age-appropriate housing is clear. But the government could do more to boost supply further. The policy levers that could be pulled are numerous and varied. Suggestions range from introducing stamp duty relief for downsizers, to sector-specific regulation to give more certainty and confidence to prospective residents. It is also vital that the government keeps the nuances of senior housing at the front of its mind when introducing legislation aimed at other parts of the housing market. Measures such as the infrastructure levy or the Renters (Reform) Bill will impact senior housing differently to standard market provision.
A more consistent and supportive planning policy environment will also help unlock both supply and investment into the sector. After years of lobbying, it feels as if that policy environment, at least, is finally about to emerge.
The report is available to read here.
Nicola Gooch is a planning partner at Irwin Mitchell