Private senior living housing supply to grow by 30% in next five years
October 8, 2019
Knight Frank predicts the value of the senior living sector’s private rental market to increase by £2.1 billion by 2024
In its latest Senior Living Annual Performance Review, global property consultancy Knight Frank says that, given the growth of investment into the senior living sector in recent years, delivery is due to rapidly increase by 2024.
Analysing the future plans of all major operators against past delivery, Knight Frank is forecasting a 30% increase to the current stock of private senior living units over the next five years. This equals an additional 50,000 private sales and rental units being delivered.
The growth in private delivery will not be spread evenly across the country. Knight Frank predicts that growth will be concentrated largely in the South East, South West, Midlands and East of England. And in London, the number of available private units priced at more than £1,000 per sq ft is likely to rise from 300 to 2,000 by the end of 2023.
Tom Scaife, head of senior living at Knight Frank, said that on the rental side, there were more than 4,000 existing senior living private rental units currently in the UK, with 93% incorporated within wider for-sale schemes, while the remaining 7% was being delivered by purpose-built rental accommodation.
“The rental market for senior living is very likely to increase in line with the changing tenure trends across the UK’s wider housing market,” said Mr Scaife.
“As well as increased interest in purpose-built rental, for-sale operators are also increasing their allocation of private rented units pepper-potted in their schemes.”
Knight Frank estimates that the value of the private rental market will increase from £1.3 billion in 2019 to £3.4 billion by 2023. This is largely being driven by greater commitments from private equity and institutional capital looking to diversify their real estate assets into alternative markets.
Phil Bayliss, chief executive of later living at Legal & General, said that, with clear social benefits such as a 50% reduction in GP visits and 40% decrease in NHS spend, the senior living sector had the ability to transform the way that people age.
“The predicted 30% step up in supply over the next five years, identified by Knight Frank in this latest report, is therefore significant,” said Mr Bayliss.
“The increase in rental property for this demographic is also promising as it is becomes increasingly important to offer choice and flexibility in all areas of the housing market. Whilst all good news, as a country, we still need to do more.
“Where we live drives material health outcomes and can significantly improve the way we age. Clear long term policy from government, which can level the playing field between retirement operators and traditional house builders, will be vital to continuing to attract investment.”
- Knight Frank’s Senior Living Annual Performance Review can be accessed at: https://www.knightfrank.co.uk/research/senior-living-annual-performance-review-2019-6699.aspx