New research commissioned by later living developer Elysian Residences, undertaken by research group Dataloft, sheds light on the growing later living market (households aged 65+) in the UK.
Entitled Aspirational later living: A Research Perspective, the authoritative and independent report reveals that London has an estimated £62bn of under-utilised space in the form of large, mortgage-free family houses, occupied by 1-2 retirees. It outlines that 65% of retirees are owner occupiers and says that these households, potentially 175,000 family homes across the capital, could downsize into purpose-built later living apartment schemes, releasing significant equity for lifestyle, healthcare support and inheritance benefits.
The report reveals London’s top five boroughs with the highest quantities of mortgage-free family homes and a significant number of retiree households.
In rank order, these are Kensington and Chelsea, with £5bn worth of under-utilised space and equity, with the average retiree property containing £2.1m worth of unused living space, typically two floors of redundant bedrooms; Westminster with £3.9bn worth and unused household space averaging £1.7m, Barnet with £3.8bn and unused household space averaging £361,000; Bromley with £3.5bn and unused household space averaging £252,000 and Camden with £3.3bn and unused household space averaging £1.2m.
Other addresses in the top 15 boroughs include; Richmond upon Thames with £3.2bn and unused household space averaging £452,000; Wandsworth with £3bn and unused household space averaging £588,000 and Harrow with £1.9bn and unused household space averaging £267,298.
Despite the significant size and wealth of this ‘family house downsize to later living’ sector, the report says that there is currently a huge undersupply of purpose-built premium retirement accommodation in the UK. Just 1% of the UK’s population live in designated retirement schemes, compared to 17% of Americans and 13% of Australians.
In London, there are currently 750,000 retirement households containing some 1 million retirees. Retiree numbers in the UK overall are currently forecast to grow by 59% by 2030 which is four times the rate of growth of the working age population.
The report shows that the number of retiree households in the capital is due to increase to 1m by 2030, which assumes that the proportion of retirees in purpose-built retiree housing will rise from the current 1% to 8%, meaning there will be a demand for 69,000 extra later living homes over the next 12-years. By 2050, there will be two million retirees living in London, double the current population.
The report says that it is because of this huge demand and supply imbalance in the later living marketplace that a fresh generation of specialist developers like Elysian Residences are in the process of building and launching new later living schemes across London and the UK to meet the forecast demand.
Elysian Residences currently has two later living developments under construction. The first, known as The Landsby in Stanmore, is a scheme of 101 apartments in Harrow a significant equity-release location. The second, known as The Oren in Hampstead, is a scheme of 46 apartments located in Barnet, a top three equity-release borough.
The report also underlines how the current generation approaching retirement have been owner occupiers for the past 40 years, and due to the rapid increase in London house prices over these decades, many retirees are sitting on large amounts of unrealised wealth in the form of housing equity.
The report identifies ten key characteristics that make downsizing space and moving into purpose-built later living homes an attractive choice for retirees. The first is good design, the benefits of living in a brand new home; the second is sociability, living in a community; the third is flexibility, the lifestyle and healthcare amenities provided to residents.
The fourth, is a carefree attitude, the benefits of a snag-free new property; the fifth is released housing equity; the sixth is the benefits of living in an urban location.
The seventh, the money and freedom to travel; the eighth, clear budgeting, rather than unpredictable household maintenance costs; the ninth, swapping spare rooms for lifestyle facilities and finally, the tenth is a good property investment since the sector is characterised by demand yet undersupply.
The report illustrates how retaining original family homes may be sentimental for retirees but it carries an economic burden, with the report estimating an average yearly household maintenance cost of £9,000 for an inner London semi-detached home, or 1% of the property value each year.
Household bills can also be unpredictable, with later living developments offering clear budgeting options. The report highlights how the work of ‘running a home’ can amount to a significant amount of time each day, with the age group approaching retirement spending three hours a day as ‘unpaid jobs’ to maintain their home. Even for those who can afford to outsource these tasks, organisational time is required in finding, employing and managing this help.
Another benefit of later living developments is that rather than unpredictable house maintenance costs and chores, a service charge is an attractive alternative. Additional services often paid for, such as gym or private club membership, car parking, house sitters and window cleaners, can be lessened by access to specifically incorporated amenities at later living developments.
The report also explains how loneliness among retirees is a problem that later living residences can help overcome. Not only do later living residences provide a sociable and supportive community, their urban locations allow easy access to a wide range of cultural and leisure pursuits. Thoughtfully designed residences combine both style and subtle living adaptions, such as lateral living, access to lifts and onsite healthcare for when it is required.
Gavin Stein, chief executive officer at Elysian Residences said, “This comprehensive new report, undertaken for Elysian Residences by Dataloft, is the first detailed analysis of the later living marketplace in London and the UK.
“It provides an authoritative insight and thought leadership into a range of issues including equity release, unused space in existing properties, the leading locations with downsizing potential, running costs, and the key benefits of purpose-built later living developments. This report sheds new light on how later living residences can help people to truly enjoy their later years.”
Prices at The Oren start from £1.6mfor a two bedroom apartment and £2.8m for a three-bedroom apartment. Prices at The Landsby start from £490,000 for a one bedroom apartment and £720,000 for a two-bedroom apartment. Penthouses start from £1.25m.