Addressing the middle market in older people’s housing

The middle market for older people’s housing is significant and largely untapped. Innovation in this space requires a host of interventions, including a better understanding of need, a shift in consumer attitudes, clarity of the offer, a sector with a unified voice and policy and legislative changes.

Future of London’s latest Ageing Cities roundtable, hosted by Arup on November 8th, brought together senior professionals in development, planning, care, property, third and public sector to discuss the gap in the middle market, how to address it and what the future could be. A lively debate produced practical and far-reaching solutions, culminating in a proposal for a sector manifesto.

Matt Lally, Associate Director at Arup, opened the session. Using WHO criteria and other data sources, Arup has developed an Index for Age-Friendly cities. In addition to metrics, the index was designed to include a perceptual dimension, measuring age-friendliness partly by capturing user experience. The index highlights a recurring theme: the importance of the everyday. The top-ranking neighbourhood in Sydney, for instance, was compact, mixed-use and walkable with good health and wellbeing facilities, high-quality public realm and strong community activities. Matt also shared models of older people’s housing from Japan, Switzerland, Spain and The Netherlands.

James Donagh presented initial findings from Barton Willmore’s Later Living Wealth and Assets Survey and Mosaic Analysis. The research looks at the asset and wealth profiles of mosaic groups with high proportions of people over 45: our existing and emerging older population. Findings suggest that groups with low wealth on retirement need a variety of housing options. This is particularly true for London, where the stand-out group are Municipal Challenge – a group with low levels of equity and wealth living in an expensive area.

Anonymised highlights from the discussion are below. This was the second roundtable of our programme, sponsored by Arup, Barton Willmore, British Land and Pollard Thomas Edwards.

The offer: ageing in place or specialised housing?

There was consensus that all homes should be well-designed and flexible, to accommodate growing and shrinking families and reduce the cost and stress of having to move in later life. Most participants also agreed we need diversity of offer including affordable housing, private rent and shared ownership.

  • Large developers should take the opportunity to pilot new approaches such as intergenerational and co-housing within bigger development sites. There are no obvious barriers to this from the GLA or at borough level.
  • A concerted effort is needed to create and sustain places that can support these new models. Good governance at the neighbourhood level will be key to their success.
  • More tenure diversity makes sense: shared ownership is a “no brainer” in London, given the wealth profile of the emerging ageing population and the price point at which housing designed for older people becomes viable.
  • The sector should embrace technology as a way to deliver care; it is no longer just about  the physical building.
  • The Arup research supported the proposition that the quality of the neighbourhood and ‘the everyday’ becomes more important as we age. Homes that relate to local context and are attractive to people who live there already are key, and enable people to stay in their own communities.


There was consensus that the market is big enough for all providers but that it is currently ill-defined; there is little understanding of incoming customers and what is important to them.

  • The HAPPI report provides a typology, but consumer awareness is low
  • Legal & General and AXA came into this market on the back of the Law Commission’s report on event fees: greater transparency reduces reputational risk.

Central policy and legislative intervention

  • The Government’s current focus is on helping young people get a foot on the ladder. Barton Willmore’s research shows older people need help too. The Scottish government is leading the way, providing help to buy for older people, including options to downsize or buy a retirement or supported home.
  • There was recognition that new products and innovation may require significant legislative change. NZ’s regulatory framework, the Retirement Communities Act (which provides the basis of the ARCO consumer code) provides protection for consumers and parameters for operator – and importantly, upgraded older people’s housing to an investable asset class.
  • More extensive policy measures such as stamp duty exemption (e.g. for downsizing) were debated but these would require a concerted lobbying effort from the whole sector.

Provision through local plans

  • Only 10% of planning policies across the country include both a policy and site allocation for housing for older people. Anecdotal evidence is that the majority of these policies only refer to social housing.
  • Planners highlighted the need for industry to engage with the plan-making process to help incorporate the needs of older people. It was suggested that local planning officers would welcome constructive conversations about local need and viability.
  • Planning use class and sub-classes for different types of housing were debated as a means of encouraging and enabling development, but there is a risk these would encourage opportunistic operators.

Instigating a culture shift

  • In London, 54% of older homeowners are under-occupying by two or more bedrooms, resulting in a huge deficit of family housing. Under-occupation is “allowing the housing market to fail on a macro scale”.
  • To encourage people to downsize, the sector needs to promote the move to later living accommodation and communities as aspirational, as is the case in New Zealand and Australia. Here, ‘consumer signalling’ has proved relatively low-cost and effective. Leadership shown by central government provided a regulatory framework and gave confidence to investors.
  • This approach is being pushed by ARCO, which is lobbying central government for a senior buy programme. A modest, branded collection of measures will give the signal to consumers that retirement living is aspirational.

Operational challenges

  • A key barrier is the lack of operators with a track record of delivering good quality care.
  • The operational costs of the housing-with-care model are high. Policy focuses on support for social housing tenants, and very little is available to middle-market private tenants who can’t fund their own extra care.
  • As a result, “the elephant in the room is that although this might be attractive to a lot of people, it’s likely to be too expensive”. “The central discussion here is us trying to understand the market metrics that make this an attractive offer in terms of viability”.


Improved housing for older people has cross-party support, as evidenced by HAPPI. It is also cross-departmental, relevant to DCLG, NHS, DWP and BIS. To address the challenges raised throughout the roundtable, there was strong support for the sector to come together; to find a unified voice through which to influence plan-making and policy; to raise the industry’s profile; and to communicate what’s on offer for older people.

The manifesto would set out what must be done for the sector to accelerate into this market, and highlight the associated benefits. A thriving, trusted older housing sector could deliver social care and reduce pressure on public finances. The sector needs to showcase what it can do.

Future of London’s Ageing Cities programme continues through February; watch this space for events, research and news of the proposed manifesto, or email to get involved.

An older citizen embracing active transport in Toyoshiki-dai, courtesy of Arup