A broken planning system, scarce land, and unclear policy are stalling a sector ready to grow, Joseph Hickling of Boyer asks: can simple reforms unlock its potential?
Demand for older people’s housing (OPH) is rising fast, but delivery is falling short. The government’s OPH Taskforce report forecasts a sharp ageing of the UK population: 18.6% of the total population is aged 65 years or older, and by 2066 this is projected to increase to 26%.
Additionally, analysis has highlighted a growing mismatch between supply and demand. The International Longevity Centre forecasts a 37% shortfall by 2040. The Mayhew Review has recommended a building target of 50,000 senior housing units a year, adding up to a million units by 2040, yet current delivery is just 7,000 units annually.
Building the evidence base
Calculating local need is time-consuming and technical, difficult to interpret and apply because there is no streamlined national methodology to assess need. Consequently need assessments at decision level can consist of many factors, including unstandardised local planning authority (LPA), county, market area, and geographical inputs.
A common methodology would ensure consistency in assessing demand, support evidence-based decisions, improve strategic planning and help meet national targets more effectively. The difficulty in implementing such a methodology would involve capturing the many segmented typologies of OPH to ensure all needs are duly accounted for. Consequently, a multi-categorised needs assessment could become convoluted and impractical to apply to the policy-making process.
To remedy this, dividing assessments into just three categories – care homes, extra care, and retirement – may be the most representative method of capturing each typology.
Issues with land supply
Many LPAs do not allocate land specifically for OPH. It is often assumed that retirement and extra care housing will come forward via C3 allocations – the planning use class for mainstream housing. However, this often sits between C3 and C2 depending on the level of care provided, creating challenges for land allocation and viability.
The competitive disadvantage for OPH in land acquisition prevents enough suitable sites from securing allocations in local plan-making processes to meet need. As a result, OPH schemes often come forward on a speculative basis, which is at odds with the NPPF.
Windfall reliance
Consequently windfall sites can often form sub-optimal locations for OPH schemes. For example, while sheltered housing is more suitable to town-centre locations, generational developments, such as integrated retirement communities (IRCs), are often better suited to larger edge-of-town locations, which – in order to secure planning permission – would usually need to benefit from an allocation.
In practice, allocations should be mandated and come forward in line with OPH need assessments, which form a representative proportion of LPAs’ overall housing requirements per plan period. To provide a mechanism for this, the NPPF could be updated to state that ‘OPH must carry the same weight and importance as C3a mainstream housing when assessing need’.
Market opportunities
At present, the industry mainly delivers more premium products – likely a reflection of the reliance on windfall sites and a constrained market. Allocating land specifically for OPH would bring greater certainty for developers, particularly by improving the likelihood of securing planning permission.
In addition to de-risking the sector and encouraging greater investment and delivery of OPH schemes, allocated sites – typically located on the edge of towns – benefit from fewer planning constraints. This allows for higher-density developments and greater scale. In turn, schemes can be optimised to deliver more affordable products for low- and medium-income buyers. Planned allocations would also help open the market to more specialist SME developers who may have previously been discouraged by the level of risk.
Next steps
Priority should be given to the recommendations that propose quick, simple and effective amendments to policy/guidance, particularly those that de-risk land acquisition and address viability issues.
Overall, there is a clear appetite among developers to deliver OPH. With government support through adoption in national policy and guidance, the recommendations of the OPH Taskforce could unlock the sector’s full potential, enabling it to meet the national target. For investors and developers, greater planning certainty and clearer land allocations could unlock significant new opportunities in this growing market.
This article was written by Joseph Hickling, principal planner at Boyer
Images by Dmitry Vechorko and William Nichols
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