The UK housing crisis is well documented and should resurface as one of the country’s top domestic priorities as we move towards post-Covid economic and social recovery. An estimated 8.4m people in England—15 per cent of the population—are living in an unaffordable, insecure or unsuitable home, according to the National Housing Federation.
Mainstream media reporting focuses purely on supply and demand. The consensus has been that simply building more houses will solve the problem and the UK government has set a target of 300,000 homes to be constructed per year by the mid-2020s. But will this solve the issue?
The UK Collaborative Centre for Housing Evidence (CaCHE) argues that affordability is just as important. Their research suggests that, since 1996, the provision of new housing stock in England has outstripped the number of new households. The stock has grown by 168,000 units per year on average, whilst the number of households has grown by an average 147,000 per year.
CaCHE states that even by building 300,000 homes a year in England, house prices would be cut by only 10 per cent over the course of 20 years. Therefore, this wouldn’t solve the crisis for a large number of people in specific groups, such as those in rented social housing.
Another big issue is tackling the number of empty homes and bringing them back into use. There are now more than 216,000 long-term empty homes in England, equivalent to 72 per cent of the government’s annual new homes target.
So, whilst building new homes will go some way to tackling the housing crisis, the problem is more complex and building isn’t the only answer.
One area receiving less media coverage is later living, which has a shortage of even greater magnitude.
There is a severe lack of specialist retirement housing, meaning hundreds of thousands of older people are stuck in unsuitable homes. This is stagnating the housing market by thwarting growing families (and, in turn, first- and second-time buyers) from moving up the housing ladder.
Figures from Legal & General (L&G) suggest that the UK has a chronic under-supply of retirement homes. They estimate that 3.3m UK homeowners over 55, often referred to as last-time buyers, want to downsize, but there are only around 750,000 UK retirement homes, making this the most under-supplied area of the housing market. Retirement properties account for just 2.6 per cent of total housing stock and are dominated largely by older stock in the affordable housing sector. Private retirement housing accounts for less than one per cent of all dwellings in the UK.
The ageing population means this issue is forecast to get worse, not better - by 2021 there will be 3.4m last-time buyer households, with a housing stock value of £1.2 trillion. If we can free up this housing stock, it would make a huge contribution to easing the housing crisis, creating family homes close to schools, balancing intergenerational inequality and boosting the economy.
The lack of good quality later living housing is the fundamental barrier to older people making the decision to move, and this must be addressed.
Policymakers, care providers and developers will now also need to consider the effects of Covid-19 and the changes that the pandemic may drive in design and operation of later living facilities. We can expect debate on the balance between densification and future social distancing requirements, and the conflict between social integration and social isolation.
The current situation notwithstanding, increasing our stock of specialist later living housing supply remains a smart way to unlock the wider housing market. This in turn will help alleviate the housing crisis and play a significant role in reducing the escalating NHS health and care costs for the elderly.
Making a difference
Schemes such as our New Lodge development in York for Joseph Rowntree Housing Trust and Newbridge Village in Hull for Pickering and Ferens Housing Association are examples of projects which give the later living market a choice of high-quality homes. Newbridge Village, with its 82 bungalows for over-55s, is the UK’s largest dedicated bungalow development.
Faithful+Gould is a leading consultant in the later living market and we help our clients to deliver high-quality retirement communities.