Estate agent Knight Frank has forecast growth in the retirement living sector over the next five years, fuelled by buoyant residential sales, as well as a healthier and more demanding older age.
In a report, Retirement living comes of age, it predicts that the market value of the private retirement private retirement living market will increase by 50 per cent from £29bn to £44bn in 2022.
The report notes that investment into the UK later living market is currently at its highest level ever. We forecast is for a 30 per cent increase in the private housing stock for retirement living.
Retirement living schemes are said by Knight Frank to provide cost-effective and efficient delivery of healthcare into people’s own homes, and, in theory, will help to alleviate some of the current pressures on the healthcare system. It notes that the retirement living market has evolved into two distinct types: retirement housing with limited on-site care, which accounts for 70 per cent of the market. The remainder is made up of housing with care /assisted living with on-site care.
The report notes that there are three distinct business models for investing into the retirement living sector:
- Developer model, whereby firms construct and manage developments independently
- Operational model, based on the acquisition of existing schemes and portfolios
- Rental model, in which firms lease their units.
There are also slight regional variations with the South West having the highest supply with 268 homes per 1,000 people. London, the North East and the East of England are at the lower end of the scale with less than 250 homes per 1,000 population.