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Reform planning and tax to kick start later living sector

Housing for elderly

More housing built specifically for older people would free up a large volume of family homes, argues Phil Bayliss. But first we need to remove the public policy barriers that prevent this

A recent report by the Centre for the Study of Financial Innovation (CSFI) laid bare the challenges facing older people in finding suitable housing in their later years. 

The research found there are approximately 15 million surplus bedrooms in the UK, the majority of which – almost 60 per cent – are in nine million households belonging to the over-65s. This demographic group has £1.7 trillion of housing wealth according to Savills, and findings from Legal and General (L&G) show that 3.1 million would consider downsizing.  

Despite this pent up demand, only 7,000 new homes built each year are designed for older people. With 180,000 households aged 65 or over being created each year over the next decade, the supply of good-quality, age-friendly housing needs to substantially increase.

“With 180,000 households aged 65 or over being created each year, the supply of age-friendly housing needs to substantially increase”

Providing enough age-appropriate housing to meet demand would kickstart the housing market by freeing up family homes, providing much-needed choice for people in later life, and enabling them to lead healthier lives for longer, reducing pressure on health services. However, right now, there are too many public policy barriers – including planning and taxes – in the way; meaning later living remains one of the largest sectors where housing needs continue to be unmet. 

Planning, as ever, remains one of the biggest barriers to providing housing for older people, with housing target numbers within the national planning policy framework failing to reflect community demographics. CSFI’s research found only around 10 per cent of local authorities have clear policies setting out the number of dwellings or care home beds needed for older residents. 

“Only around 10% of local authorities have clear policies setting out the number of dwellings or care home beds needed for older residents”

The government should ensure that all councils have such policies and that they deliver on them, driving much-needed new investment into their communities. The planning system should also recognise the large variation between different retirement living models, and the benefits that the best schemes can offer to residents' health and wellbeing, such as a 50 per cent decrease in GP visits and a decrease in hospital stays of around 80 per cent. 

These communities focus not only on how to extend lifespan, but how to extend health span. By encouraging downsizing, they will also help free up family homes and unlock the rest of the ladder, enhancing housing options for all. 

Legal & General, through its later living operators Guild Living and Inspired Villages, are creating these types of communities and currently have a pipeline of 24 sites in operation or development, representing a gross development value of nearly £3 billion. This will deliver around 4,500 homes with flexible wellbeing and care provision, available as and when required. In light of the current crisis, the delivery of these homes has escalated in importance. Over the next five to ten years, we have significant ambitions to increase delivery further and remain dedicated to bringing to market the right homes which meet the needs of the older generation.

“Developments such as these should be recognised within a specific ‘retirement communities’ planning use-class”

The government should be doing all it can to unlock this kind of investment through reform to the planning system. Developments such as these have very different business models to traditional housing schemes, and should be recognised within a specific ‘retirement communities’ planning use-class, or for planning practice guidance to define ‘housing-with-care’. This would allow controls to be put in place to ensure that the promised quality and service are actually delivered, providing clarity and reassurance to consumers. And for the later living sector, it would create clearer treatment and enable the section 106 and community infrastructure levy contributions, paid by such developments, to better reflect the wider health benefits they confer on society. 

Council tax on C2 use classes should also be reduced to reflect residents’ reduced need for local services, and there should be tax relief or financial incentives for C2 land use where care is provided on site by specialist care teams integrated within the scheme. 

“The way we have housed our older generation in the UK remains a huge societal failure”

Turning to the operation of later living communities, we would like to see increased government support for new training academies for care staff to give them the skills for dealing with the diverse needs of people in later life, alongside more academic research funding into wellbeing for the over-65s. 

All these measures could be enfolded in primary legislation, a Retirement Community Act, with consumer protection at the heart of the drafting. A similar piece of legislation in Australia and New Zealand created a huge inflow of investment into the sector.

The way we have housed our older generation in the UK remains a huge societal failure. Housing policy now needs to catch up with the demands and opportunities of our ageing demographic: getting this right has benefits for everyone.

Phil Bayliss is chief executive of later living at Legal & General and chairman of Guild Living


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