Delivering the retirement housing we need is a giant challenge

Everyone needs at least one David versus Goliath (DvG) moment in their career, where a plucky underdog takes on the odds to achieve what seems impossible.

My most bemusing DvG moment was when, in a past life working in a housing association’s communications and marketing team, I received an unexpected email. It told me that one of our developments – a scheme of 60 or so homes – had won a prestigious architecture award.

The competitor it pipped to the post? Tottenham Hotspur’s then-new £850 million stadium (or $1.08 billion, if you’d like to scale up its Goliath-ness).

One of the things that helped this scheme – the housing association’s first ever development, as it happened – win out against the odds is that it served a very clear purpose and was designed by its architects, Levitt Bernstein, with that laser focus in mind. It was an extra care scheme for the over-55s. Thoughtfully designed, its homes were created so that older people could rightsize from bigger houses elsewhere (freeing them up for younger families who were more likely to be in cramped flats) into homes they could live in entirely independently or with extra care available on-site. It features dementia-friendly design, communal living spaces, and much more.

Schemes like it are now on the rise – and expected to be one of the biggest opportunities in residential real estate investment.

Senior housing is a broad asset classes which, depending on how you define it, can range from retirement villages, where residents live independently but with shared facilities such as restaurants or meeting spaces, to care homes. They also tend to offer a mix of tenures, including rental, shared ownership, and outright ownership – although the rental sector is particularly likely to draw capital.

And for good reason: we need more rental homes for older people. Amid inter-connected cost-of-living and housing crises, in the UK as abroad, the focus is on the now – and, now, broadly speaking older people are relatively well-off thanks to the pensions triple lock.

Further in the future, that’s where things get stickier for older people - whispers abound that the triple lock is considered unsustainable by government.

Much less social housing is being built than in the mid-20th century: between 1946 and 1980, around 126,000 council homes were built a year; these days, it’s closer to 6,000 social homes.

And it’s harder to get on the home-ownership ladder than ever before, meaning fewer people today will own their home on retirement. According to the ONS, in 2022, full-time employees in England could expect to spend 8.3 times their annual earnings buying a home (compared to approximately 3.5 in 1997).

And given the state of rents in the private rented sector, which only the most generous private pensions could cover, more creative ways of providing homes to older people is essential.

Beyond the immediate personal costs – and necessity – of sorting out senior housing, it could bring big economic and societal benefits too.

One thing we’re going to be hearing a lot more about, particularly as the NHS comes under increasing pressure from an ageing population, is social prescribing.

Social prescribing, as I learned in another past life when providing communications support to NHS England in promoting it to GPs, is the idea that you can improve people’s health and wellbeing by referring them to community activities and initiatives. Loneliness is one of our biggest health problems, and developments designed around fostering social interaction are a clever way of tackling it.

We’ll hear more on intergenerational housing. This won’t just be on middle-aged families welcoming their parents into their home – although we’ll see more of that, particularly given cultural norms in certain communities, which will need better provision of homes designed to suit that need – but it also means communities set up to encourage interaction. Creative examples include my former housing association employer, which is developing a scheme in south London that will see primarily homes for older people built alongside flats for postgraduate students from a local university, to encourage social interaction that benefits both parties.

And of course, we’ll hear a lot more about senior housing. Expect to see it as a bigger part of regeneration projects – Related Argent’s Brent Cross Town is the latest to highlight that part of its plans will include retirement living – and expect to see local authorities clamour for new types of housing that could reduce their care bills.

Of course, one of the most substantial routes for ploughing capital into creating more senior housing is, appropriately, pension funds. Institutional investors including the likes of L&G and Aviva, which are already investing heavily in residential real estate, are often considered behemoths with the cash they have to spend – but, in the end, they’re often much more like a collection of Davids than one Goliath.

The UK’s housing crisis often seems insurmountable and – astoundingly given the sometimes-political lethargy we see – hurts every single one of us.

We’ll need our own DvG moment to overcome it. That means making sure our pensions work harder today by investing in housing, so we’re better off tomorrow with the homes we need.