Phil Schmid, senior director at CBRE, reveals why senior living needs to be a priority for solving the UK’s housing crisis

Is it a shortage or a mismatch of needs?

The UK’s housing crisis is often framed as a shortage of homes, particularly for first-time buyers.

But this view misses the deeper structural issue, that many people are living in homes that no longer suit their needs.

This mismatch creates inefficiencies across the housing market, from under-occupied family homes, to a lack of suitable options for older adults seeking to downsize or ‘rightsize’.

The Older People’s Housing Taskforce states that we need an estimated 30,000-50,000 new later living homes per annum to meet the growth of our aging population, but we only build around 7,000 a year.

This is where senior living communities, also known as retirement villages, come into play.

By enabling older people to move into purpose-built, supportive environments, we can improve health outcomes, reduce pressure on the NHS and social care systems, and free up housing stock.

Research suggests that for every bedroom that is added to the retirement stock, two to three are released in mainstream housing.

It’s time to view senior living not as a niche offering, but as a vital component of the UK’s housing and care strategy.

Understanding senior living

It’s important to differentiate between managed retirement communities and care homes.

Senior living communities represent a middle-ground lifestyle choice.

They are for older adults who want independence, community, and access to support if needed, but are not reliant on care.

These environments have been shown to deliver measurable benefits.

A landmark study by ExtraCare Charitable Trust, in partnership with Aston and Lancaster universities, found that residents in retirement communities experience:

• A 75% reduction in GP visits
• A 50% reduction in hospital admissions
• Improved mental wellbeing and social connection

Even without considering housing stock issues, these outcomes translate into significant cost savings for the NHS and social care services.

Prevention, rather than cure, is the guiding principle, and it’s clearly working.
However, we would be naive to suggest that senior living is a silver bullet.

Retirement communities can be expensive, and not everyone wants to move.

Emotional ties to family homes, and a lack of awareness about available options, all play a role.

Meanwhile, government policy continues to favour first-time buyers, often overlooking the needs of older homeowners who could benefit from downsizing.

Why the right type of investment is so important

Despite these challenges, the senior living sector is gaining momentum, particularly among institutional investors.

Institutional investment refers to capital provided by large organisations, such as pension funds or insurance companies.

These investors seek long-term, stable investments, such as senior living.

At the end of 2024, CBRE Bristol advised Audley Group on a landmark £40m sale and leaseback deal with institutional investors.

This was a pivotal moment for the sector, which reiterated the growing confidence in the long-term income potential of retirement communities.

Nick Sanderson at Audley highlighted: “Institutional investors have long been attracted to the retirement living sector.

“The secure, index-linked revenue stream is not easy to replicate! It’s then been down to those of us within the sector to explore the opportunities and create new, innovative funding solutions.”

Unlocking this capital requires a more-co-ordinated approach, and one that aligns planning policy, housing strategy, and social care reform.

Policy, planning, and the role government plays

The UK Government has begun to recognise the importance of senior living in addressing the housing crisis, as exampled in The Older People’s Housing Taskforce, launched in 2023.

In a recently-published final report, the taskforce calls for a national strategy to expand housing options for older adults.

Key recommendations include:

• Expand older people’s housing/later living housing at scale and ensure it is affordable to live in and viable to finance, build, and operate, creating an older people’s housing guarantee scheme to support investment and development
• Integrating housing and health policy, recognising that where people live directly affects their wellbeing and care needs

These are welcome steps, and it’s definitely going in the right direction, but it’s not enough.

Planning reform must prioritise age-friendly housing.

Currently senior living developments can be treated like traditional residential projects, which fails to appreciate the additional costs and services that are provided in the development, which causes blockers.

By streamlining this process, and making it easier for developers, new supply could be unlocked faster, and more efficiently.

Local authorities need clearer guidance and incentives to support senior living developments. And housing policy must shift from a narrow focus on family homes to a broader vision of housing as a continuum, one that supports people at every stage of life.

A look to the future

The UK’s housing crisis is not just about building more homes; it’s about building the right homes, and supporting people to live in them.

Senior living communities offer a compelling, evidence-based solution that addresses housing, health, and social care challenges in one.

But to realise this potential, we need greater collaboration between government, investors, developers, and care providers.

We need policies that support innovation and investment.

And, above all, we need to rethink what ‘home’ means in later life, not as a compromise, but as an opportunity for independence, wellbeing, and dignity.