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Redefining retirement living: is the rental model the answer?

Britain is in the midst of a senior living housing crisis – according to CBRE, an undersupply of 614,000 mid-market senior living units nationwide to be exact.

The same research also found that the majority of those approaching retirement are open to downscaling, but a lack of senior living housing is hindering retirees’ ability to move.

For baby boomers, and increasingly Generation X, reports such as these make frustrating reading given the numerous benefits of later life assisted living. The reality is that the majority of those who move into assisted living end up healthier, happier more active and less lonely than those who don’t.


The impact of the shortage of senior living housing extends beyond just the elderly themselves, too. At Birchgrove we know that for every one resident that joins one of our communities, a property with on average 2.3 underoccupied bedrooms is freed up This helps tackle the wider housing shortage and reducing the need to develop on greenbelt land.

To tackle the crisis, it’s time for a rethink. Yes, Britain desperately needs greater investment into and development of mid-market retirement housing units. But what if the solution lies not just in the number of units being developed, but the model of ownership too?

Reading the headlines, you’d be forgiven for thinking Britain’s rental market is dominated solely by millennials struggling to get on the housing ladder. Yet demand to rent is skyrocketing amongst the elderly too, with the number of older renters set to surge from 400,000 (5.7%) today to over one million (11.5%) by 2033. In today’s environment, the traditional model of owning a retirement home simply doesn’t work for everyone.

Exit fee liabilities

First and foremost, renting enables retirees who have sold their family home to free up a considerable amount of equity – be it for themselves to invest or put towards travelling, or to financially support children and grandchildren.

Renting also removes the burdens and often unexpected expenses of home ownership and gives owners far more flexibility should their circumstances change. Furthermore, the rental model eliminates stamp duty and exit fee liabilities, and means families aren’t saddled with trying to sell the property when the occupier passes away.

But increasing the supply of rental retirement communities means overcoming both the challenges facing the traditional buying market and some rental market specific hurdles too.

Firstly, a shift in mentality is required. Owning a home has become an aspiration woven into the nation’s fabric; for many elderly people, the idea of shifting from ownership back to rental is seen as regressive, therefore.

While renting in retirement isn’t for everyone, the more retirees that successfully rent, the more retirees will consider, and potentially benefit from, the model.

Greater private investment

Secondly, the retiree BTR market urgently requires both greater private investment, and, by extension, more competition. It may seem strange for the CEO of a retiree BTR developer to be calling for more market competition, but the scale of growing demand means more players in the market are desperately needed than the handful that operate today.

Finally, the sector is also in real need of greater public sector assistance. Specifically, there remains a dearth of planning officers, and those in the job remain under-resourced.

This isn’t to be critical of our planning officers, at all. I am constantly amazed by their performance given the circumstances they find themselves in – in addition to a lack of resources, they are frequently facing hostile environments in the form of developers, local residents and the committee members themselves.

Labour’s recent promises to overhaul the planning system and to hire more than 300 public sector planners is welcome – as would be a commitment from government to introduce a minimum (say 10%) of C2 housing future masterplans. Ultimately however, it will take greater collaboration, investment, flexibility and ambition from across the whole industry to begin tackling Britain’s surging rental-in-retirement demand.


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