In its latest Seniors Housing Development Report, global property consultancy Knight Frank has announced that it expects the number of specialist seniors housing units across the UK to grow by nearly 10 per cent over the next five years.
The total number of seniors housing units in the UK now stands at approx. 750,000 distributed across 25,000 schemes, though a significant proportion (82 per cent) is older legacy stock built before 2000. The firm is forecasting this to grow to 820,000 by 2025.
A substantial increase in schemes with varying levels of onsite care, as well as rental only options, is also to be expected, said the firm.
The increase in delivery is being fuelled the inflow of new investment and a growth in new operating platforms. Already this year £450 million of capital has been invested in the sector and Knight Frank has identified an additional £1.3 billion due to be committed. Investment into the seniors housing sector has been strong in the first half of the year, and this is expected continue.
The amount of capital already committed means Knight Frank forecasts total investment volumes for 2021 to exceed those of 2020.
Annual delivery has risen from a previous historic average of 6,690 units per year (2011-2015) to 8,293 per year (2016-2020). Knight Frank is predicting that annual delivery will increase further – reaching 14,000 units per year by 2025.
Lauren Harwood, associate at Knight Frank, said: “In response to an ageing demographic, the need for age appropriate housing has grown significantly. Ranging from standard housing through to aged care facilities, the offering of seniors housing in the UK has evolved markedly over the past decade and will continue to do so.”
Knight Frank’s analysis of the future pipeline points to a move toward providing more choice for residents, including through mixed-tenure and rental-only options and more schemes with varying facilities and services. Housing with care schemes account for 57 per cent of the identified pipeline, with nearly 18,000 units either under construction or with planning submitted or granted. There are just over 13,200 retirement housing units in the development pipeline.
The rise in rental product is also growing. The number of private senior living rental properties in the UK is forecast to increase by 166 per cent in next five years, from almost 5,000 currently to more than 12,000 by 2025. Growth will be driven by a rise in the number of housing with care operators allocating a proportion of their pipeline to the rental market. Even accounting for such rapid growth, senior housing rental stock will only account for 5 per cent of the total number of private senior housing units, which is currently dominated by ‘for sale’ stock.
Despite the positive outlook for delivery, it is still falling well short of demand, says Knight Frank.
The rate of delivery is dwarfed by the UK’s aging population. Over the last five years, 41,464 new seniors housing units have been built, whilst the population of 75 year olds in the UK has risen by more than 550,000.
Harwood said: “It’s clear that a step change in new delivery is required if this huge imbalance between need and supply is to be reversed.”
Planning also remains a key barrier for increasing the delivery of seniors housing in England, with the vast majority of councils across England underprepared to provide suitable housing for seniors. In 2020, Knight Frank’s analysis in partnership with Irwin Mitchell suggested that more than half of the local authorities in England do not have clear planning policies in place to support housing for seniors.
Credit: Source link
