Shortage Of Suitable Accommodation For Our Aging Population Unless Action Taken

The UK’s ability to support tens of millions of elderly people in terms of their care or accommodation needs will be close to collapse by 2029 unless the government takes decisive action, a new report warns. The new study by Irwin Mitchell and the Centre for Economics and Business Research (Cebr) also predicts that if left that long, it could be too late to fix the problem. The report highlights:

• Demographic change is contributing to the care crisis. As our population ages, more people will be demanding care and rising life expectancies means individuals will live in poorer health at the end of their lives
• Workers need to save hundreds more each month into their pensions to meet future care needs - but only the top 10% of households can afford care from their income
• The social care funding gap is expected to increase from £1.5 billion in 2019/20 to £3.5bn in 2024/25
• The UK is facing an upcoming shortage of elderly care accommodation. Current nursing and care home capacity is around 460,000 beds- if capacity is not increased the UK will reach a shortage of supply in residential homes by 2029
• 45% of councils have not sufficiently planned for where elderly people will live- both for those needing care and those not needing it yet
• Significant, structural supply and demand imbalance in the retirement accommodation sector is only getting worse
• Urgent need to review planning system, land supply and regulatory environment.

Several factors make up the report’s tipping point calculation including current care home capacity, state funding levels and pension wealth, and the signs point to the UK reaching a shortage of supply in residential retirement homes by 2029 at the latest.

Guy Sackett, Head of Irwin Mitchell’s Real Estate Retirement Living and Care sector said: “The Government has failed to act on social care reform in recent years, with the long-awaited green paper promised since 2017 put on hold indefinitely last year. The fact that we now know the elderly care system may well be in crisis at the end of this decade, without a massive re-think, is a stark warning of what is to come.

“Part and parcel of any reform is making sure we have suitable accommodation for our aging population to live in. Retirement accommodation with care is one of the most undersupplied areas of the UK housing market in the UK.”

Sackett points out that ONS has predicted that the number of people in the UK aged 60 or over is expected to pass 20 million by 2030 and there are now more people in the UK aged 60 and above than under 18.  

Yet current estimates of the annual rate of delivery of new homes across all sectors of the country stands at 240,000 p.a, with approximately only 3% of these homes (under 7,500) being specifically designed for the retirement housing/care sector. Put simply there is a significant, structural supply and demand imbalance in this sector.

And it doesn’t look like local authorities are doing enough to curb this imbalance. Recent research by Irwin Mitchell revealed that 45% of local councils (147 out of 329) still have neither a clear elderly accommodation policy nor site allocations for their ageing populations in their local plans. 

Not only that, but there also appears to be little correlation between what is in a local authority’s local plan and the demographic urgency facing that district. For instance, Salford, Horsham, Guildford, Maidstone and Woking, which all scored highly in IM’s survey for having both an explicit accommodation policy and site allocations in their local plans, are areas where the proportion of residents at 65+ is comfortably below the national average. By contrast, Bournemouth, Tewkesbury, Hastings and Christchurch, all with a high proportion of people at 65+, remained in the lowest category with neither an explicit accommodation policy nor site allocation.

Carl Dyer, Planning partner at Irwin Mitchell, whose team carried out the research said: “Our findings showed that only a few more local authorities are taking the need for an elderly persons’ housing planning policy more seriously than they did two years ago and the pace of change has been too slow.  This issue still does not seem to have come onto the radar for many boroughs which is deeply concerning- since it is not an issue that is going away.

"Our findings are evidence of the appalling failure of local authorities to plan for the demographic shift”.

His colleague Guy Sackett continued: ”The acute under-supply of purpose built retirement accommodation (“PBRA”), including extra care housing, retirement villages and assisted living schemes (all of which anticipate the future care needs of residents), as well as a projected shortage of care and nursing homes spaces as we reach the 2029 tipping point outlined in the Cebr report, means a significant proportion of the elderly population will continue to live in houses they have likely lived in for decades. 

"These will become gradually more unmanageable as their care requirements increase, and where the necessary care and support is not always immediately available, especially in more rural locations.”

“We have a new majority government and the first post-Brexit budget coming up. Whilst there have been promises for a cross-party solution to the “Care Crisis”, we need a bold and fast-acting plan before it is too late. The elderly care sector is already on its knees, and continuing to ignore the issue would be a disservice to the millions of people that will be reaching old age in the next twenty years. 

"Providing the right accommodation for our aging population is essential if we are to avoid the time-bomb.  The Government needs to think radically and join up the dots. And it needs to do so now!”

Read the Elderly Care Crisis report