The Mayhew Review: future-proofing retirement living - easing the care and housing crises
The review follows on from the Government’s 2021 white paper ‘People at the Heart of Care: adult social care reform’. This white paper, amongst other things, set out the governments vision for adult social care for the next 10 years and included the funded proposals that will be implemented in the next 3 years. The Older People’s Housing Task Force was set up as a result and, although this task force is yet to be operational, it is anticipated that the Mayhew Review will be used to shape and inform the work to be carried out by the Task Force.
In the review, Professor Mayhew argues that whilst the social care crisis has been widely documented in parliamentary policy and Government documents, there has been a failure to translate the ‘noise’ in this area into housing policy or the delivery of care to older people. He argues that whilst the white paper has suggested “every decision about care is also a decision about housing” there is no holistic strategy for the older living housing sector.
The Mayhew Review concludes that housing policy needs to focus on last time buyers as much as first time buyers. Commenting on his report, Professor Mayhew argues that the UK is failing to adapt to the changes in society caused by the ageing population.
Extrapolating these trends leads to some uncomfortable conclusions
- The population in the UK is rapidly increasing. Between 2000 and 2020 the UK population rose from 59 – 69 million and by 2040 it is estimated to increase to 72 million. The population aged 65 and over is expected to increase from 11.2 million to 17.2 million by 2040.
- It is predicated that there will be an increase in single occupancy housing (because of death of a partner, separation and children leaving home) and a forecasted peak in the 75 – 84 age bracket in 2040 with 1.2 million individuals estimated to live alone.
- Around 80% of the 65+ population own their own homes outright.
- Only 7,000 retirement homes are built annually (out of around 200,000 new builds each year).
The report comments on the combination of the above resulting in many homes being underoccupied and a stagnant market created as people fail to move into smaller properties later in life. Professor Mayhew explains that fundamental changes need to be made in the care sector for the older generation and, in particular, the housing options that are available to them. The review sets out several recommendations to deal with the shortfall in housing the older generation and suggests there is appetite within the sector to tackle this issue.
Accelerated programme of retirement housing construction
The Mayhew Review recommends the construction of up to 50,000 new retirement units per annum. By building more retirement housing, the existing housing stock could be more efficiently utilised which would help to alleviate the housing crisis.
Presently the quality and location of retirement homes are not fit for purpose. Building more retirement units could arguably displace more expensive nursing and residential care as people would be healthier and supported in their own homes for longer.
Integrated retirement communities
The Mayhew Review considers that a significant portion of new retirement units should be “integrated retirement communities”. Integrated retirement communities provide a range of housing options (for example homes for rent, purchase or shared ownership) along with integrated well-being and care services within residents’ homes and leisure facilities (such as restaurants, gyms and community halls). The Mayhew Review notes that these retirement communities are more popular in the US, Australia and New Zealand but queries whether the UK will make this cultural shift.
The sites for the construction of new schemes should include town centres. Currently retirement developments are built in rural or suburban areas. Utilising declining high street space would have a dual benefit: (1) help to repurpose some existing vacant space in high streets and regenerate urban areas; and (2) providing easy access to local amenities such as transport, shops and healthcare facilities.
Presently, there seems to be a lack of appropriate policies within development plans which link social care and housing policy. Greater co-ordination between housing departments at district level and the social care provision from county council level is therefore necessary.
The current planning designations and infrastructure levies may discourage investment in larger retirement developments. Retirement housing needs to be put on a “level playing field” with new build residential and nursing care developments which do not attract infrastructure levies. In addition, retirement housing for the active elderly may currently require the provision of affordable housing whereas retirement housing or care homes that provide care to occupants do not fall within the same planning use class and may be subject to less onerous conditions.
Financial advice should be offered to those who are considering a move into retirement housing as there is a distinct lack of financial advice available for those would like to move around the costs of renting, the social care cap on lifetime costs and other considerations to be taken into account when moving home.
Financial incentives could be used to encourage downsizing by “last-time buyers”. This could include reductions in stamp duty (like that available for first time buyers) or grants for the least energy efficient homes. The Mayhew Review also suggests that home buyers who improve the energy efficiency of their home by retrofitting could be given a stamp duty rebate if they improve the thermal efficiency at the point of purchase.
- The Mayhew Review highlights fundamental changes needed to housing policy in order to adapt to changes in society as a result of the ageing population. In order to alleviate pressure on the NHS and the housing crisis, changes to our later living care and housing is required.
- The proposals set out in the Mayhew Review largely do not require significant public expenditure or investment (aside from the recommendations around stamp duty reductions and rebates). The recommendations further highlight the extent of the investment opportunity for private investors in an under served sector. There is an opportunity to develop and construct the 50,000 new retirement homes a year.
- There would be increased demand for later living housing if stamp duty was cut for last time buyers. A financial incentive for older people to downsize could result in greater movement in the property market to alterative retirement living options and have a knock-on effect further down the housing ladder.
- The retirement developments Mayhew suggests could come in many forms (i.e. isolated buildings to whole villages) and therefore this is not excluding or ringfencing certain types of developers.
This article was co-authored by Trainee Isobel Lewis.