Undersupply of 614,000 Senior Living Units Presents Opportunity For Mid-Market
• CBRE Research identifies opportunities in Birmingham, Edinburgh, London and Southampton
Investment into mid-market senior living developments is needed to address the shortage of senior living facilities across the UK, according to a new report from global real estate advisor, CBRE.
CBRE’s first senior living survey analysed responses from over 2,000 UK residents aged 55+ and found that 62% of respondents are open to moving into a senior living scheme in the future.
A quarter (24%) of respondents are already considering a move in the next five years, with demand highest in Birmingham, Edinburgh, London and Southampton. However, supply is notably constrained in these cities and as a result, is hindering take-up.
The research found that more than 69,000 units would be needed across Birmingham, Edinburgh, London and Southampton alone to address the supply gap. At a UK level, CBRE estimates that there is an undersupply of 614,000 senior living units.
“Historically, senior living schemes have targeted prospective residents who live in more affluent areas of the UK due to the high costs of land and construction,” noted Alice Marwick, Head of Operational Real Estate Research at CBRE. “On a national scale, the majority of housing wealth distribution falls into the £250- £500k value segment, meaning there is a large cohort that would benefit from senior living schemes if there was a more affordable option.”
The report also found that 63% of respondents in the 75+ bracket have yet to downsize since retirement, highlighting a potential cohort for senior living schemes. Downsizing provides the opportunity to release housing equity, and respondents across a number of cities said they would consider renting in a senior living scheme to free up equity from the sale of their house.
Andrew Surgenor, Senior Director, Operational Real Estate at CBRE added: “As a member of the Government’s Older People's Housing Taskforce, it’s evident that there is a need to amplify the choice and quality of housing available to this cohort of the population. Developers can address this with increased tenures, including rental and affordable tenure, unlocking potential for a more diverse, accessible offering.”