A few weeks ago, The Club at The Ivy in Central London began to fill with people from across the world of property and finance. They were united by a common purpose: unlocking and scaling up the UK’s Later Living sector.
Unlocking this opportunity is no small feat. Representatives from finance, design, development and operations were all in attendance at the Rosling King and Assael Architecture’s breakfast seminar to discuss these challenges, the opportunities and the urgency of creating a dedicated, purpose-built Later Living sector in the UK.
Joining me on the panel was Tony Throp, of Puma Investments, Anthony Oldfield, director at JLL and Joe Gaunt of hero, the digital wellness start-up, all MC’d by Alex Pelopidas of Rosling King LLP. Together, we discussed the full spectrum of development: finance, design, planning, through to delivery, operations and daily interaction with residents.
Later Living’s blend as both a vanilla real estate asset and a complex operational proposition means investors can be hesitant initially to engage as fully with the Later Living offering compared to PBSA and BTR. This makes funding costs high. We need to ramp up our efforts to educate investors and secure their buy-in as Britain’s population continues to age.
Key to these efforts will be explaining how Later Living will work operationally, as these developments are complex compared to other residential investments, such as Build to Rent (BTR). They require a mix of trained staff, some medically, or the involvement of a third party care provider, to support the needs of elderly residents. Presently, the care industry has a significantly high staff turnover, which - as Tony Throp noted - can make investors nervous about investing in these assets. To ease these nerves, developers will need to ensure they show investors clear plans for good staff quality and retention as part of the initial planning.
Investors are also concerned about potential demand for the sector. But given that the population of over 65s will increase by almost 30 percent over the next 17 years from 11.9m today to 16.6m in 2036, the opportunities are massive in the UK as the rise in competing providers shows.
What’s more, the struggling climate of retail and the resulting struggle taking place on the high street offers developers and designers a great opportunity to create Later Living communities located in urban centres, near amenities and services - vital for attracting an ageing population that increasingly wants to stay active, connected and enjoying their life.
The success that Later Living communities have in countries like Australia and the US offers clear examples we can follow here in the UK, and use. Indeed, Anthony of JLL noted his surprise that US and Australian developers and operators had yet to enter the UK market given the sheer scale of untapped opportunity the UK represents.
Getting the messaging right
The Later Living sector suffers from a lack of clear product definition and marketing, with too many consumers seeing the market as merely a retirement home repackaged under a new name. As a sector, we must demonstrate what an aspirational product would look like for downsizers and rightsizers, offering a genuine alternative.
One way in which we can do this is by changing the debate around ageing. The ageing population should not be made to feel like a burden or endure a lower quality of life in their later years. By moving the dial, we can position Later Living as life’s next great adventure, building real and lasting outward facing communities.
What would help speed up this shift is greater transparency over operational costs and fees for residents. There is a will to legislate on this, but without a one-size-fits-all model - which Later Living does not, and cannot currently adopt - policy solutions will not come easy. It is not impossible for dominant model to emerge victorious, but the likelihood is that there will be a variety of products on offer, given the differences surrounding location and extent of offering.
Clarification of use classes, and a more consistent approach by Local Authorities may clear up the waters somewhat, but to do so Later Living must offer a more unified vision, as without one the government does not look interested. But they should be. Later Living could hold the keys to unlocking the housing crisis, as pensioners downsize or rightsize, larger properties will free up and trigger a chain reaction within the market, unlocking equity that has been dormant for decades.
And doing this is a matter of necessity. As Anthony Oldfield poignantly noted, the current rate of house building is around 170,000 new properties a year and the number of over 65s grows at a net rate of 190,000 people a year. House building throughout the country must factor in the ageing population with far more urgency. The government and local authorities have rightly legislated for affordable housing quotas to be part of new developments - there’s a case for extending this requirement to purpose-built Later Living homes.
What can designers do?
Design must challenge the perennial negative preconceptions and change the debate around dedicated housing for the elderly. Creating an aspirational product requires high quality design as a prerequisite, in locations with great social amenities and good transport links to surrounding areas. Clearly, urban locations tick a lot of these boxes, but space restricts opportunities for additional spaces, as well as necessities such as car park spaces.
As designers, Later Living could help breathe new life into the high street, so too could dual purpose ground floors, where a communal space between the residents of a Later Living complex and the wider community can help foster a sense of community, identity and help address social issues such as loneliness, with an alarming amount of elderly citizens reporting that they suffer from loneliness.
Ensuring it delivers on its promise
There is a growing understanding within the built environment that technology and wellbeing are both fundamental to the service offering of the emerging Later Living sector. Wellbeing, after all, is not just for time-poor millennials but everyone.
Technological penetration among elderly generations is a considerable challenge but it is improving, year on year. It has allowed families to connect at times and in situations that would have otherwise been impossible ten or fifteen years ago, such as Apps that inform family members or carers that an elderly person has fallen in their home. Integrating technology into Later Living will be an important and valuable offering to the sector and to society moreover - it will undoubtedly help to save lives and improve the quality of those lives.
But as important as technology will be to Later Living, the key operational driver is community. Building Later Living developments that encourage interaction and engagement between residents is vital, as it helps tackle loneliness, creates social value and it ensures that residents can be independent, enjoying their later years rather than have decisions made for them or feeling like they are a burden on their families.
These service-offerings and operational aspects are fundamental to creating a truly aspirational product. This requires a versatility of offering, catering to the diverse needs of the elderly community, treating residents as individuals and ensuring the quality of their lives.
Again, it comes back to transparency. To scale-up an aspirational Later Living product means that we must understand the operational costs involved, and that these costs are clearly communicated to the consumer. For retirees, income may not be a monthly salary, but instead be tied to an individual’s pension, assets, dividends, amongst others. To ensure that residents are comfortable and confident in their new communities, we must be transparent and fully assisting of the needs that they may have.
Going forward, we’d all like to see Later Living evolve to meet the needs and expectations of the future generations of downsizers and rightsizers. But to do so, we need to change cultural perceptions around both ageing, downsizing and retirement housing itself. Policy can play some part in this, providing clarity, stability and certainty that both consumers and financiers require, but ultimately we as a sector have to change the conversation and offer a genuine alternative. This breakfast event sought to spark that change. It’s evident, however, that there is still much work to do.