Growing old doesn’t mean what it used to; people are living longer, healthier lives and, thanks to better healthcare than ever before, life expectancy is on a continual rise. In developed nations, global life expectancy is 82 years old, and by 2030 it is expected that one in five people in the UK will be over 65.
As life expectancy rises, and the quality of healthcare increases, the demand for senior living in the UK is being driven upwards.
This shift in the life expectancy of the nation means that normal life doesn’t let up as early as before; rather than pulling the brakes at 65 to settle into quiet retirement, people are seeking new ways of living fulfilled and active lives well into their old age. They want to live somewhere that helps them to live out the remainder of their years in comfort, which is where senior living comes in.
So, why exactly is UK senior living set to be the next big property investment trend?
There is an enormous demand for senior living; however, at present, the demand far outstrips what is available. Last year alone, three million UK retirees were actively looking to downsize from their current homes. Still, only 8,000 senior living units were built in 2018, and less than £1 billion was invested in the sector as a whole – only a small slice of the UK’s £62 billion investment market.
This discrepancy between supply and demand gives property investors a huge opportunity to fill the gap first and reap the benefits. And, with retiree assets in the UK totalling around £1 trillion, it would be an oversight to ignore the sizeable economic buying power of the more mature property seeker.
Denton’s partner Deepa Deb commented that “It’s the next growth asset class…” and that “The science is obvious and demand is outstripping supply.” reflecting the up-and-coming nature of this investment area.
Why has UK senior living been slow to grow?
While the UK senior living sector is ripe for investment and growth, investors have indeed been historically reluctant to put their hands in their pockets.
There are a few reasons for this, one simply being that investors have been more than able to make sizeable profits while avoiding this sector and all of its complexities, and the other being the attachment of the UK baby boomer population to homeownership over renting.
Homeowners have enjoyed a largely uninterrupted period of time in which their homes have grown in value, and hold an almost irresistible lottery-esque allure in possible payouts in the year ahead. This has proven a barrier for providing rental senior living accommodations and held larger investors back.
However, if there was ever a time to take the plunge, then it would be now. The opportunity in UK senior living is huge, and investors are already beginning to twig, with Legal & General embarking upon a multibillion-pound investment programmed in UK senior living.
Legal & General is funding two senior living businesses; Inspired Villages and Guild Living. Both of which offer options to buy, and Guild Living to buy and to rent. Perfect for the UK market.
UK senior living is a sector on the rise; demand is at an all-time high and supply is lagging behind, while the ageing population of the UK continues to grow in both size and wealth, without being able to find anywhere suitable to downsize to.
While there have been barriers to this in the past, they are hardly insurmountable, and it is possible to adapt your offering to make it attractive to the current market – i.e. through making senior living properties buyable and rentable, as done by Legal & General.
Now is the time to invest and take advantage of an incredible opportunity to be one of the first to truly own this space, and take the leap. To find out more about the opportunities in UK senior living, email me on firstname.lastname@example.org
Here at Goodall Brazier, we are at the forefront of the global built environment sector, and have connections with some of the largest built environment organisations worldwide. For the experienced leaders your business needs to lead it towards success in the senior living space, contact Goodall Brazier today.