In this blog Peter Hardy discusses Build to Rent and later living.
The Build to Rent arena is becoming very well established now and in danger of becoming quite mainstream, notably recently with the attention lavished on it by the Housing White Paper and in particular the Planning and Affordable Housing for Build to Rent consultation paper now in circulation. CBRE say that there has been a 1 million increase in PRS in 5 years and occupiers in this sector now account for some 18% of households in the UK (as much as 30% in London).
What is becoming noticeable in the sector, however, is the drip feed of a new angle on it from some of those involved. To date most of the players in the sector have seen this as something for young professionals who will probably look to buy their own place in a few years. But some are now seeing the opportunities at the autumn of life for later living. This was a topic that was touched upon at both the recent BPF Residential Conference and the Movers and Shakers PRS Forum but not developed much there. Conversations with the Build to Rent community still focus on the young and have not developed that thinking very far yet. Perhaps understandably, the community is still finding its feet and assessing its success.
However, as we are all aware, we are living longer and need to deal with the active old before they go into extracare or care homes. Many older people whose family have grown up want to continue a close involvement in a community and it is a fallacy to say that all old people want to tend the roses in a country cottage. Plenty of them want to live in vibrant communities in a city. Many people are working longer than they used to, now that is possible due to technology and the decline of heavy industry. They also want to live near their children and to support them in bringing up their grandchildren. And of course many of them have large sums of equity in properties that they can use as a supplement to their pensions if they downsize.
It is well known that it is good for older people to be able to interact with the young for a lot of reasons and some experiments have been done in mixed living. In 2014, a government sponsored commission called for a shake-up of planning rules saying that traditional care homes are "fatally damaged" and called for housing for older people to be built on the same sites as gyms, libraries, doctors' surgeries and student blocks. Indeed, the Dutch (being forever ahead of us on most good ideas) have already instigated a programme of allowing students to live rent free with elderly residents and act as good neighbours to them. They have to observe one rule which is not to be a nuisance and (perhaps facetiously) note that noise is not a problem as most of the older residents are hard of hearing!
Of course, professional Build to Rent properties are not care homes and never should be. But there is a good case to be made that they can be marketed to older people as well as the young. This would increase the market and stimulate demand from a completely new class of person. Some of the more thoughtful inhabitants of the Build to Rent space such as Aitch and Hub Residential are already working this and the well-financed retirement specialists such as Audley have an enormous warchest that they could use in part in this slightly different but necessary product.
As always with the fascinating Build to Rent space, the way that it morphs and develops continues to surprise and I look forward with interest to the next developments – hopefully in good time for my own retirement in (all too) many years time.
For more information on the Build to Rent market please read our report: Build to Rent – Funding Britain's Rental Revolution