One of the big success stories of the UK development industry in the past few years has been the growth of the Build to Rent sector with developers looking at ways of diversifying in to this market. Care and retirement living has always seemed like it would be compatible for a specially tailored version of the build to rent model. The evolving needs of older people, their financial position and the current challenges in the housing market means it is now becoming a reality.
McCarthy & Stone already have a link up with Places for People to deliver open market rented properties, but they will be bringing forward their own rental product (including shared ownership units) in 2019. This broader offer to customers dovetails with their new strategy of seeking to make the best use of their existing assets while sales rates are constrained by the current market challenges.
We are also seeing significant innovation within other parts of the sector. Birchgrove (a development arm of Castleoak) are currently constructing a build to rent scheme which allows for a significant provision of care (set out under a separate agreement) to be provided within the occupier’s own apartment. Then we also have The Kohab who are developing an intergenerational model. They will build out apartments to rent, primarily for older people, but provide a discount to younger people who live within the development in return for providing 20 hours of assistance a month being to their older neighbours.
While it is still very early days for the care and age-friendly housing sector’s foray in to delivering these new products, it is a logical progression and one which offers further opportunities across two different sectors. Developers in the build to rent sector will be monitoring the success of these ventures to see what lessons they can learn about evolving their own offer as well as looking at joint ventures with care and retirement living developers.
From my perspective there are many benefits of mixing these products within traditional build-to-rent and general market schemes. First it can improve placemaking by delivering more diverse developments in a greater range of locations and act as a greater ‘pull factor’ for older people when considering downsizing. Second, it offers more flexibility for older people who want to avoid inheritance tax by selling their home earlier in their retirement. This would ultimately have much wider benefits by freeing up existing family housing.
This is an issue we’ll be returning to in more detail in a separate briefing note, so please get in touch with me via the contact links in this article if you would like us to circulate this to you.