Senior Living: An overlooked critical component in the UK’s housing targets?

Senior living is an overlooked aspect of housing policy, yet the growing number of older adults in the UK means we must develop housing that caters specifically to this group. We see this as both a necessity and an opportunity. Developing senior living solutions can provide suitable, accessible housing for an aging population, while also contributing to the wider housing market by freeing up larger homes for younger families.

At PIC, we’ve committed significant capital to develop these housing solutions. By doing so, we aim to improve the quality of life for older adults while securing steady returns.

Senior living needs to be included in broader housing targets, alongside social and affordable housing. While local authorities are rightly focused on addressing the shortage of affordable homes, leaving senior living out of the equation risks failing a large, and growing, segment of the population. Setting clear housing targets for senior living can encourage developers and investors to focus on this space, fostering growth and innovation in a sector that desperately needs attention.

Currently, only 2-3% of housing in the UK is designed specifically for senior living (Knight Frank, 2022). This is a stark contrast to countries like the US and Australia, where around 5-6% of older adults live in specialised retirement housing. This gap signals an opportunity for growth. The UK senior housing market remains underdeveloped, which is why PIC Capital is focussed on creating high-quality, purpose-built housing that emphasises independence and community, rather than just care facilities.

The demand for senior living is set to increase dramatically. By 2030, the UK will need an additional 725,000 senior living homes to meet the growing demand (Housing LIN, 2023). This surge is being driven not only by the aging population but also by changing preferences, as more older adults seek to downsize and live in age-appropriate, community-oriented environments. We expect demand to rise by 40-50% over the next decade, but despite the clear demand, there are several challenges that need to be addressed to accelerate development:
 

1. planning hurdles:The complexity of the UK’s planning system often treats senior living developments like traditional residential projects, causing delays and increasing costs. Simplifying this process, or offering expedited approval routes for senior housing, could unlock significant new supply (Housing LIN, 2020)
2. viability challenges: Building senior living developments requires significant upfront investment, particularly for communal spaces and healthcare facilities. While the long-term returns are attractive, the initial financial outlay can be prohibitive for some developers. By employing innovative financial models and collaborating with public bodies, we can make these projects more viable
3. land availability: Securing affordable, well-located land is a growing challenge, especially in urban areas. Government incentives, such as releasing public land or offering tax breaks for senior living developments, could help alleviate this issue. Nimbyism occasionally poses a challenge. Concerns from local communities often stem from misunderstandings about what senior living developments entail. Our projects, which focus on creating quiet, well-integrated communities, tend to alleviate these fears once their benefits - such as freeing up family homes and reducing pressure on social care - are communicated. Early engagement with local communities is crucial to overcoming resistance, and we prioritise these conversations in our planning processes (UK Government, 2020: Building Better, Building Beautiful Commission Final Report).

As the UK’s population continues to age, the need for senior living solutions will only grow more urgent. By including senior living in housing targets and addressing the barriers to development, we can ensure that older adults have access to the high-quality, community-focused housing they need. PIC is committed to playing a leading role in this market, not only to meet the needs of our policyholders but also to drive social change and contribute to the wider housing market.