It’s not just today’s millennials who face tough times to find a suitable home of their own.
The over 55s are growing in number across Europe but this group is struggling to find housing to match their needs.
It’s a problem so great that it threatens to outstrip the urgency of providing affordable, starter homes for younger generations.
“The shortfall in older people’s housing is far greater than that for starter homes in the UK,” says Adam Challis, JLL’s Head of Residential Research. “But because older people are usually already living in their own homes, unlike potential first-time buyers, many people don’t realise this gap in the market exists. And it’s pretty much the same picture across Europe.”
Whether it’s finding a location they know, or one that gives them access to amenities and hobbies, over 55s are increasingly seeking small, easy-to-run homes that are able to adapt in line with their needs.
Creating supply to meet demand
Some developers are starting to accommodate this growing demand. Housing with care for more affluent retirees is a fast-growing sector in the UK while mainstream housebuilders such as the UK’s Barratt Homes is now adapting its traditional four bedroom model to tempt older buyers with homes with much larger master bedroom suites.
Challis says: “You may argue that older people are the wealthiest cohort in Europe and should be able to sort their housing out themselves. But if the choices or supply don’t exist, they can’t. And because older people’s lifestyle requirements vary enormously, their choice of housing needs to be varied, which it currently isn’t.”
He believes older people don’t necessarily want a traditional retirement home, they just need properties that suit their lifestyles. New-build multi-generational family houses with self-contained flats may be another type of solution for this age-group – and for busy parents needing reliable childcare from elderly relatives.
One big change affecting supply is the rising cost and shrinking availability of land. Many older people want some garden and a single-story home but where land values are high, as in much of Northern Europe, developers are less inclined to build this lower-density, less-profitable product. In fact, less than 2 percent of new housing in the UK is bungalow-style.
“But there’s room for innovation here too,” Challis argues. “Housebuilders could provide flats for older people with roof gardens, accessible by lifts. It doesn’t have to be bungalows or nothing.”
But rather than waiting for developers, some retirees are taking a direct approach to their retirement living and building their own homes. “Established middle-class retirees are already commissioning one-off retirement properties,” says Challis. “But in the Netherlands, land is being made available for retirement housing, with small developers providing a design-and-build service, each home designed to suit an older person’s exact needs.”
Avoiding long-term damage to the housing market
If residential housing for the elderly isn’t developed as a sector, the knock-on effects could be felt across the entire housing market. Younger people will be unable to trade up and move into family homes, which will remain under-occupied by one or two elderly people. Movement of labour will be constrained, with people unable to take up jobs in new areas because there are no family homes to move into.
“Because there are such big structural implications if this sector doesn’t grow, I think it’s beholden on policy-makers to come up with the solutions,” adds Challis. “In the UK, the policy focus for far too long has been on first-time buyers and getting young people into home ownership. It’s fair to say this is now too narrow an approach.”
He wants to see policy-makers stepping in and finding solutions within local communities. “Very often retirees want to stay within just a few miles of where they’ve always lived, but often there’s not the type of housing they need,” he says.
“I would love to see the provision of retirement-type housing given a special planning status that is similar to the provision of local affordable housing. This would free-up much-needed family housing that older people are currently staying in, but rarely maintaining or improving.”
In many rural regions of Europe, such as non-coastal Spain, eastern Netherlands and northern England, where populations and economies are dwindling – with younger people migrating to towns and cities for work – this sort of provision could bring much-needed inward investment.
Time for change
While policy continues to be geared towards younger buyers, it is likely that developers will continue to prioritize servicing this sector of the market.
However change will come, Challis believes. “All of the big builders know that homes for the later years will be profitable, because the demand and money is there. They’ve seen the statistics.
“They just need policy incentives. Only then will the sector take off in the volumes it needs to – for the good of the elderly and for the residential sector as a whole,” he concludes.