By 2021, it’s predicted that 23% of the 73 million population will be aged 65 and over. Statistics in care homes show that in 2011, 59.2% of residents were aged 85 or over – an increase from 56.5% 10 years before.
By 2035, it’s estimated that the number of 85+ people needing 24 hour care will double to 446,000.
With these figures in mind, there’s undoubtedly a worry on the strain this will put on the care sector, if there isn’t enough space to house everyone.
However, while there used to only be the option of a care home, there is now an alternative choice: retirement villages. A popular choice for younger pensioners who aren’t yet ready to move into a care home (accommodation is typically available for over 55s), they could be the solution to the ageing population problem – provided the demand is met – which is why it’s so important they are promoted.
The demand for downsizing is increasing
According to the Elderly Accommodation Counsel (EAC), there are more than 730,000 retirement housing units across the country. Savills believe that with demand increasing the way it is, this could increase to 1.7 million units.
The rest of the real estate industry agrees too, with nine out of ten professionals anticipating demand for retirement living will grow in the next five years – which would make it the most popular residential option.
FTI Consulting surveyed 6,500 people across some of Europe’s largest cities including London, Manchester, and Berlin. 63% of respondents stated that retirement living was the most desirable asset class, and thought that people choosing to live in retirement villages would prefer to be in the city.
So, it’s clear the demand is there and will only increase further over the years. With people living longer, healthier lives, it makes sense for them to downsize, while still enjoying life.
Enables independent living for longer
The clue is in the name, with retirement villages offering so much more than just accommodation. Retirement villages can include:
- Health clubs
- Swimming pools
- GP surgeries
- Village halls
- 24 hour concierge
Retirement village living also usually offers plenty of social activities to encourage residents to get to know each other; and residents’ families are always encouraged to visit too.
With help and support always available on-site for residents who need it, retirement villages can be a huge draw for people who don’t want to give up their independent living, but want the reassurance of future care should they need it.
Research has shown that retirement village living can actually increase life expectancy – for women, they can live for up to five years longer.
Presents a lucrative investment opportunity
For financial reasons, retirement villages can be a more attractive prospect for would-be residents, when compared with traditional care homes.
Many retirees simply aren’t qualified to receive any state help in paying for care home costs. It’s predicted that the average care home costs almost £1,000 a week for a room, which isn’t financially viable for many people. Therefore, lots of people have to resort to selling their family home, to be able to afford to pay for care.
While we’re not denying that retirement villages have similarly hefty price tags, the difference between the two, is that residing in a village acts as a financial safety net.
Retirement villages provide residents with the opportunity to buy their own home or flat as a leasehold. They then pay an annual service charge, which covers the cost of any additional care required while living there.
For many would-be residents, this is a much more attractive proposition than care home costs, because while they will still likely sell their family home, they’ll own their residence at the retirement village, which can be left for their family.
Some retirement villages have rental agreements in place too; with residents having the opportunity to release housing equity from their current home ownership, or potentially take part in a shared ownership scheme.
Retirement villages present an attractive alternative for over 55s. Yet currently, for every existing retirement unit available, there are four people wanting to move into them; so as Savills suggested, more need to be built to make them effective.
Once demand has been met, residents will be able to benefit from independent living, care when needed, and a financial safety net.
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