UK senior housing facing 46,000-home shortfall

The UK is facing a shortage of up to 46,000 senior living homes in the next five years, according to a report by JLL. Approximately 36,700 senior homes are currently in planning and expected to be completed by 2029,  increasing the market size to about 808,500 homes, the UK Seniors Housing report found. But to maintain current demand, the UK needs more than 840,000 homes, resulting in a shortfall of 31,500. JLL noted that not all planned schemes will receive approval, and if only approved schemes are delivered, the shortfall rises to 45,900 homes. This deficit is expected to worsen as the demand for senior housing accelerates due to longer life expectancies and increasing health concerns. According to the report, the senior housing sector in the UK has experienced a compound annual growth rate of 0.8% since 2019, totalling 771,848 homes across retirement housing and integrated retirement communities. In comparison, a more mature market like New Zealand has grown at a rate of 5.4% per year over the past decade. Although the report found IRCs make up just 12% of current senior housing stock, they are the fastest-growing segment, expanding at an annual rate of 3.6% over the past five years. IRCs are projected to become the dominant form of senior housing, accounting for nearly half of the sector’s delivery since 2019. The report said the growth of IRCs needs to address the imbalance between the proportion of affluent older people and a sector that primarily offers affordable tenures. Currently, 72% of senior housing comprises social rent, compared with just 17% in the wider housing market. Market rent makes up only 0.5% of senior housing schemes, while it represents 20% of all housing. JLL’s report identifies the private rental market as a significant growth opportunity within the senior housing sector. Although still a small component of tenure make-up, the number of predominantly market rent schemes has risen by 20% since 2019, particularly within IRCs, where the rate of growth among market rent schemes is more than double at 42%. Anthony Oldfield, director of healthcare capital markets at JLL, said: “With our population of those aged 75 and above forecast to increase by 11% in just five years, the need for more senior housing units has never been more apparent. “Beyond quantity, we must ensure to offer a range of high-quality options to fulfil the diverse requirements of seniors, from those desiring social rent, accounting for 72% of senior housing, to those looking for private ownership and rent opportunities, a segment that has seen growth of 20% since 2019.” Images/REX/Shutterstock (5782832a)