Imagine if there was solution that could ease the burden of social care costs on the UK’s cash-strapped councils, that could deliver affordable housing options for those who need it, and that could alleviate rising levels of loneliness and bring back a village-like community feel to large swathes of the UK.
Well, there is. The solution lies in the provision of multi-tenure, multigenerational communities. New places where old, young and everyone in between lives together in perfect harmony, solving numerous crises for the UK in a single swoop.
The trouble is, said a panel of experts gathered at the London Real Estate Forum last month, solutions may be quick and easy to find, but much, much harder to put into practice.
The issues are clear. The UK has an ageing population – within the next 20 years there will be a doubling of the population of 85-year-olds; the housing market is congested – older people are staying in oversized homes, clogging up the market; and the cost of adult social care is escalating daily.
Can the solution be delivered?
“Senior living or multigenerational living is going to help in a huge way,” said Montagu Evans’ head of research and strategic insight Jon Neale. “By providing basic services on site, you can eliminate a reasonable portion of social care costs and by providing an aspirational and interesting product that people can move to, it frees up the existing housing stock more for families who desperately need them.”
Sounds great in theory, but what about in practice?
Honor Barratt, managing director of Birchgrove, said she tried to create a blended senior living and student scheme, but struggled to get the scheme off the ground owing to a lack of comparables and therefore inability to value and fund the project.
“I would love to somehow be able to deliver these models in a way that the valuers, the planners, the bankers, everybody will get their heads around,” she said.
Sophie Bevan, director of regeneration at Liverpool City Council, is hopeful that a new project the council has just brought forward will be a test bed for those models. The council, with Montagu Evans as its adviser, has just launched a search for a development partner for its 27-acre Festival Gardens site on the edge of the city centre. The council wants the land to be developed as a “thriving, sustainable, healthy and inclusive neighbourhood” with multigenerational living at its heart.
But getting the financing model right, will be key for the council to achieve its ambitions, said Bevan.
Watkin Jones head of acquisitions Jonathan Lacey said a major challenge for developers in bringing forward sites with ambitions, such as Liverpool’s at Festival Gardens, is the size and the multiple buildings required.
“When we talk to our funding partners, they tend to have a specific mandate for which they’re investing, which might be a BTR mandate, a student mandate or a senior living mandate; they might be able to amalgamate them or use different fund within their business but, as it stands, that’s not particularly straightforward,” said Lacey.
Mike Auger, managing director of regeneration specialist Muse, agreed.
“It is more an investment and operational issue,” he said. “We want to address local need and deliver things that are going to last long-term, both physically and socially. We want resilience but it does come round to how can we help the investment sector be more fluid. That is a real challenge for us.
“If you have to deal with not just viability, not just your planning, not just your building contract, but you’ve got to get four funders all lined up simultaneously, then you’re aiming at bullseye, you’re not aiming at a bigger target and that is the biggest problem of the lot.”
To get those funders lined up, there needs to be a more holistic approach to the living sector, more joined-up thinking, more grown-up thinking, said Legal & General managing director of housing, Simon Century.
Grown up thinking required
“We need to get to a slightly more grown-up level of thinking, collectively in this country, about how we think about value,” said Century. “We need to be thinking about housing as a whole. Housing hasn’t really been thought about as a form of national infrastructure for decades and that, to me, is the fundamental starting problem.
“If you say this is long-term national infrastructure, then that requires long-term thinking and that drives a whole range of choices around how both local government thinks about placemaking and intervention. It requires a long-term view of what you want society to look like in 20, 30, 40 or 50 years’ time and if you start with that as the end game, you then work backwards and find out what series of actions we need to take as a country to bring that vision to life.”
Devolving responsibilities for their own assets to local authorities was also underlined as important in the quest to make truly inclusive communities viable. Several experts around the table said the current focus on “best consideration” was one of the barriers to growth of the concept.
Montagu Evans partner Oliver Maury said that while procurement rules – including best consideration – could be considered blockers, more could be done to use it as an enabler.
“The Labour government needs to think carefully about how it can give more flexibility to local government to do the right kind of deals to meet these broader objectives,” said Maury.
He wanted to see more autonomy given to the public sector at a local level to dispose of assets in the way they see fit.
“If we can trust local government to make those disposals in ways they think meet the wider benefits then, 9.9 times out of 10, it will lead to better outcomes,” he said.
Paul Creed, head of development and placemaking at the Royal Docks, agreed. He said that too often best consideration was based on land value capture rather than the money you could save through development and the positive impact it could have on NHS costs and social care.
For Kevin Beirne, head of retirement at Octopus Real Estate, investors needed to be able to see growth and scale in the sector to be able to buy into it fully. He cited the shift of the BTR sector from nascent to established as an example.
Moving out of nascency
“I foresee a world where we as investors get much more comfortable and get out of the nascency period,” he said, adding that all that was needed was the right structure.
But, perhaps that structure already exists. Ruth Gordon, cabinet member for placemaking and local economy at Haringey Council, believes the solution may be in the 15-minute concept, while Anna Kear, chief executive of Tonic Housing, which operates an LGBTQ-affirming retirement community in south-east London, reckons she already has the structure. While funding for her project had to come from charitable donations and a loan from the GLA, Kear is convinced the model is replicable.
“Although we operate a senior living scheme, we have a huge volunteer cohort of younger people and actually we’re addressing similar issues – loneliness and isolation – in the younger population,” said Kear. “They’re getting as much out of it as our elders because they’re learning the history and they’re sharing the experience together.”
She added: “I’ve seen the power of when it works well. It is quite incredible, and politicians are missing a trick here by not understanding that proactive investment can actually save money.”
Liverpool’s Bevan said: “I think the model, whether that’s economic, financial or social, is just not working. The inability to deliver the number of homes that we need and social cohesion – everything is just not really working that well and we cannot afford to keep going the way we are going.”
“We need to be innovative, and government probably has that role in underwriting what is perceived as the risk to changing the way we do things,” she added. “This way of thinking could unlock a number of different opportunities, but it does mean that government will have to think differently. It could be genuinely transformative, but we’ve got to be really bold.”
Image © SewCreamStudio/Shutterstock
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