The Mayhew Review - Future-Proofing Retirement Living, issued in November 2022, has the premise that the UK is failing to adapt to the impacts of an ageing population. Mayhew bills this as both a housing issue (in the wider Living sector sense) and a care issue.

Proposed solutions therefore need to be holistic and considered but if they are the expected outcomes, getting it right will not just have a huge positive impact on older people, but also younger people and everyone in the middle, social care and the NHS, which is compelling.

The magnitude of the Later Living problem

Some stats:

• The population aged 65+ is expected to increase from 11.2m today to 17.2 million by 2040 overstretching social and health care.
• People are living longer.
• 80% of people aged 65+ own their own home.
• An average of 7,000 retirement homes are built annually, falling far short of what is required.
• Current policy is that people should be supported to live independently in their own homes for longer, which some misinterpret as remaining in the original family home.
• Specialist retirement housing accounts for only 10% of older UK households.
• To get on track, Mayhew recommends at least 50,000 new retirement homes to be built each year.]

Inertia

The Review recognises that we have got a bit stuck in our ways: older people’s expectations are narrow, as are society’s as a whole, and housing policy nearly always focuses on the first time buyer, not the last time buyer. The result of this is that family housing is essentially blocked and underoccupied. This inherent inertia is exacerbated by a number of barriers and, whilst Mayhew doesn’t set too much store by the old “my home is my castle theory”, he does note a number of practicalities that are off-putting for the older generation considering moving into retirement housing:

• Doing nothing is easy.
• Moving is stressful.
• Financial decision-making is hard.
• It is expensive to access good advice and older people tend to be asset rich and income poor.
• Concern about sufficient income until death and costs of maintenance.
• Not enough choice of retirement housing.

Supply side issues

The last barrier in the above list has been a self-fulfilling prophecy – a lack of suitable alternatives to staying in your family home in old age means there is just not as much demand, and so it goes on. Mayhew finds that many people want to age in the area in which they have lived all of their lives, suggesting that local developments are key. One of his recommendations is, as you would expect, to build more retirement housing (50,000 homes a year) but also to create “urban villages” as part of town centre reimagining to repurpose declining high streets. The living sector is vital to this urban resurgence and will give retail and leisure the benefit of the “grey pound”, making our town centres more vibrant and reflective of the wider community.

Innovation

Another of Mayhew’s recommendations is to embrace Integrated Retirement Communities (IRC), the likes of which are successful in the US, Australia and New Zealand. IRCs are purpose built with different housing options and care packages with mixed tenures available. The argument for more IRCs is compelling from a health outcome perspective - there are fewer falls, shorter stays in hospital and fewer GP call outs. Evidence also suggests people live longer in IRCs than in standard housing. The main blocker to more IRCs (and retirement housing generally) being built, however, is seen as the planning system (a theme for all Living sectors). 

The reasons range from suggestions (anecdotally) that Local Planning Authorities do not want to grant permission for schemes that could result in greater health and social care costs for that authority. Policy is also skewed towards delivery of housing for first time buyers or families. There is also the technical designation of later living developments with so-called extra care apartments, with their own front door being considered residential C3 Planning Use and Care Homes being C2 residential institutions. This distinction matters in terms of numbers of approvals and refusals, but also through the viability assessment as C2 use does not trigger CIL or affordable housing contributions. 

The Review notes therefore that delivering care homes is easier than delivering retirement housing, and so there is an inherent bias/difficulty in classifying an IRC which combines both. One proposal is that there should be a planning policy presumption in favour of any older housing with care hybrids brought forward. Furthermore, the favouring of developments where local employment is supported also skews the dial towards care homes rather than housing with care. In short, the planning system needs to get with the programme and cater for these more modern solutions for later living so that there is more of an emphasis in how we live in our old age, not how we die.

Incentives

Noting the significant blockers, what will persuade policymakers to get on and make changes to help us deal with this issue? 

It needs to be a vote winner, right? The government probably has a maximum of two years to make any sort of inroads here before the next election. If it brings forward a policy that, not only helps first time buyers, but also relieves pressure on the NHS and social care, as well as contributes to dealing with the ageing population problem, surely this must appeal? But how do they do this? 

Well, it is obvious to all of us (including Mayhew) that, in the same way that successive governments have sought to help first time buyers, helping last time buyers will have the appealing knock on effect of releasing family homes onto the second hand market. Mayhew recommends the following:

• The government should conduct research on financial incentives to downsizing.
• Stamp Duty for last time buyers should be put on an equal footing with first time buyers.
• Home buyers who improve energy efficiency by retrofitting and improving the thermal efficiency of their property should be entitled to a Stamp Duty rebate.
• Financial advice is given to last time buyers who want to move into retirement housing or similar. 

All very sensible. However, to pick holes in what is an excellent set of recommendations, I would add that, in various places where last time buyers are mentioned, Mayhew could also consider the increase in the build to rent model for older people. They are often simultaneously last time sellers and first time renters and they too will most likely need a lot of support to make the leap to the rental model for all of the uncomfortable reasons set out above and more. 

Surely, change which benefits older people, homeowners and the NHS is a Conservative vote winner and, if this is not obvious, we can spell it out (with thanks to Ipsos Mori):

• Older people – a large and growing share of older people vote Conservative.
• Homeowners – homeowners tend to be more interested in politics and, it is thought, favour Conservative.
• NHS and social care – the NHS continues to be the top issue for British voters.

It is clearly a no brainer that this needs fixing. However, Lucy Frazer MP is the fifth Housing Minister we have had this year and the fourteenth in twelve years. Any expectation that she can “fix this” or even start to grease the wheels of change must therefore be tempered with realism. She has a lot on her plate but this problem is only going to grow in significance without thinking big, removing inertia, innovating and incentivising.