Planning Remains Key To Unlocking Development Opportunities For The Senior Living Market

New research produced by global property consultancy Knight Frank and law firm Irwin Mitchell has revealed that councils across England are underprepared to provide suitable housing for seniors.

The new research has identified the ten opportunity areas* ripe for development of seniors’ housing across England. Knight Frank and Irwin Mitchell have distinguished areas where there is clear potential for senior living to develop, as well as those areas where local factors are creating a barrier to progress.  

Developing suitable housing will be essential given that the country has an ageing demographic and people are living longer.  By 2037, it is forecast that one in four people in the country will be over 65 (ONS). These ‘best in class’ local authorities meet the needs of the UK’s ageing population by allocating sites for seniors housing in their local plans; adopting a supportive planning policy that recognises many key stakeholders have a role to play in meeting the housing needs of seniors; and taking a supportive position on CIL. 

Lauren Harwood, Head of Senior Living Research at Knight Frank says: “This research is released against a backdrop of the Covid-19 pandemic, which has placed a particular spotlight on people in their later life. This has made it clear there is a need for local authorities to put plans in place to ensure there is a suitable, age-appropriate choice of housing for seniors.

“There is currently a huge supply and demand imbalance of senior housing in England, which is widening amidst a growing and ageing population. It is vital to increase the provision of seniors housing. This is part of the solution to create more capacity in the social care system while also supporting the wider housing market. With that in mind, it is crucial that developers understand where the opportunities are, and how they can access these to help meet the needs of our seniors.”

Despite this, some Local Authorities are not sufficiently planning suitable accommodation for their ageing population.

Nicola Gooch, Planning Partner at Irwin Mitchell adds: “We need all local authorities to take the same approach if we are to unlock the potential of senior housing in England. There has been a marked improvement in the number of local authorities planning for seniors housing in recent years, but there is still a long way to go before the necessary support is in place to deliver our population’s elderly housing needs in full.”

Irwin Mitchell carried out a similar survey in 2017, which ranked local authorities between ‘A’ and ‘D’; in 2017, 62% received a ‘D’ ranking, meaning the local authority did not have any specific planning policies in place for senior housing. A repeat of the survey in 2020 found that 161 (50%) are still in the ‘D’ category. While this represents a small improvement, the number of councils not planning for an ageing population remains significant. (See appendices for detail).

However, the number of ‘A’ rated authorities that have a clear planning policy for seniors housing has almost doubled – from 9.7% of the survey in 2017 to 18.6% in 2020.

Nicola Gooch of Irwin Mitchell continues: “Despite some improvement it is extremely disappointing to see that 50% of local authorities in England have neither a useful planning policy nor site allocations in their local plans to provide for such accommodation. Local authorities have moved forward in the past three years – but only by very little steps and certainly not fast enough to cover the demographic shifts. The current patchwork approach to local plans is holding back the development of the sector and needs to end. A national and local policy framework that works to promote a uniform and supportive approach to senior housing is required.” 

Lauren Harwood of Knight Frank concludes: “One of the clearest demographic changes in our country is the ageing population and it is worrying that we are not doing enough yet to address this. Not only for our older population, but also because encouraging downsizing and moves to appropriate housing has been shown to benefit society more broadly. 

“Studies have shown that moving to appropriate seniors housing releases more family housing into the market and delays or reduces the likelihood of ‘crisis events’, such as falls, which trigger health interventions by the NHS and, in many cases, move into institutional care facilities. It is time for both central and local government to take the demographic shift seriously and start planning at the very basic local plan level for our ageing population.”

Other key findings of the survey are:

• Very few large cities appear to be close to addressing the challenges posed by housing an ageing population. Many major cities are a “D” rating- including Birmingham, Bristol, Derby, Leicester, Oxford, Sheffield and Southampton. Leeds is an exception- it has an A rating for planning and performs well in the overall opportunity rankings also.
• London is increasingly becoming an ageing city and London boroughs exclusively make up the nation’s top 10 ageing local authorities. Its 65+ population is due to increase by 32% between 2017 and 2029.  Despite this, London is underperforming when it comes to delivering housing for its senior citizens, with 22 boroughs currently holding a planning score of ‘D’. While the new draft London Plan recognises the importance of the sector, its record on delivery has been poor. In the first three full years of the plan (2017-2019 inclusive) just over 700 senior living homes per annum were delivered (totalling 2,100 units), compared to the target of 4,115 units per annum (12,345 units over the three-year period). 
• As we adapt to new policy environments and learn from past experiences, we are hopeful that the speed of gaining planning permission and the overall supply of homes for seniors will increase in London. The analysis highlights there are opportunity areas, particularly within the South West corridor of London, where there is potential for significant growth. Currently these boroughs perform relatively poorly in the planning score, but nonetheless have other factors firmly in their favour.
• There are also some boroughs bucking the trend in London. Camden scored highest out of the London boroughs, and second overall in our overall opportunity score for private delivery. Camden has a specific policy supporting seniors housing. Its local plan makes clear affordable housing is likely to be sought with a flexible approach to the scale and location, and residential CIL charging rates apply. 
• Birmingham has a projected growth rate of 22%, and an existing 65+ population of 150,000 individuals will increase to 183,000 by 2034. Birmingham has the potential to perform much better, but in line with other large cities, its adopted planning policies do not prioritise senior living. Birmingham has no housing allocation, no policies supporting delivery, affordable housing is levied on C2 development and there are no CIL benefits compared with residential development. Since 2010, there has been an average annual delivery of 208 senior living units across the local authority, with no schemes delivered since 2018. Without a change in policy, the survey warns that the city will not meet the needs of its ageing demographic’s housing requirements.
• By contrast Cheshire West & Chester is a ‘best in class’ local authority, having an allocation for seniors’ housing, a supportive policy environment, a clear position on affordable housing and CIL requirements for C2 use. It is also the only authority to appear in the top 20 opportunity areas for both private and affordable operators.

Methodology for identifying opportunities areas

In deciding the “opportunity areas” the research has combined:

• Updated analysis of the local plans of each of the 321 local authorities in England, which have been graded according to their approach to housing for seniors.
• Data considering the wider demographic changes and economic indicators within these areas including the estimated number of individuals aged 65+ in each local authority, how this percentage will grow and existing provision of specialist seniors’ housing.

Results of the Updated Planning Survey

2020 survey results

Out of 322* local authorities 60 (18.6%) were graded A, 80 (24.8%) were graded B, 21 (6.5%) were graded C and 161 (50%) were graded D.

2017 survey results

Out of 329 local authorities only 32 (9.7%) were graded A, 72 (21.9%) were graded B, 22 (6.7%) were graded C and 203 (61.7%) were graded D.

*Changes in local authority numbers due to changes in local authority boundaries between 2017 and 2020. Where a newly combined authority does not have a new local plan, the rankings were attributed to the local plans of the legacy authorities.

Criteria for Grading Planning - Grading Local Authorities as either A, B, C or D according to the following:

• A. A clear policy indicating details of the number of dwellings/care beds needed, timeframe in which to achieve this, and specific site allocations given
• B. A clear policy as above, but no land or site allocations
• C. Site allocations, but no credible elderly housing policy
• D. Neither credible policy nor site allocations- with a policy at most confined to generalisations. For example, 'We will make provision for housing for all types of people, including the elderly and disabled'.