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Healthy Homes for Healthy Lives: How Specialist Housing Can Address the Ageing Population Challenge

The UK is getting older

The UK has a rapidly ageing population – a growing demographic that will only put further pressure on our already desperate housing crisis. It is projected that, by 2039, the number of people aged 75 and over will double from 5 million to nearly 10 million.

Over recent years, the Government has focused policymaking on specific reforms to help younger people get onto the housing ladder; or, in some cases, they have actively abandoned any progressive housing reform at all. Schemes such as the Help to Buy ISA and Help to Buy Equity Loan threw a lifeline at those first-time buyers looking to get their foot on the housing ladder amidst a backdrop of austerity and a squeeze on the public purse. However, in this focus, the Conservatives have failed to properly address the vulnerable, rapidly ageing population who are unable to pursue the specialised housing they need.

Recently we have seen the need for a better approach to older people’s housing championed within Parliament and the establishment of the Older People’s Housing Taskforce, a joint effort from the Department for Levelling Up, Housing and Communities and Department of Health and Social Care. However, with the change in Housing Minister once again and the looming General Election next year, the Taskforce is unlikely to make the necessary progress to address older people’s housing challenges. Research from the National Housing Federation (NHF) argues that we need 38,000 new homes for rent for older people each year; much more than the 8,000 we are currently achieving.

Specialised social housing for older people is an important and necessary way to ensure that older people can live in homes that suit their needs, and to address vital health concerns. To address this, the next Labour Government will need to implement a significant programme of building for older people, embedded across two key commitments made at the 2023 Labour Party Conference: Angela Rayner’s commitment to building 1.5 million new homes, and Wes Streeting and Andrew Gwynne’s 10-year plan for a National Care Service.

What can Labour do about it?

Labour have recognised the need for adapted housing and have included provisions for this within the National Policy Forum document. However, whilst this is useful, there remains a need for large-scale development that can provide the need for housing at scale and foster communities.

This is where a partnership in Birmingham may provide the outline to give Labour a big step up in achieving its ambitious home ownership target whilst pursuing a deeper social cause

An exceptional scheme

In 2004, when Birmingham City Council was looking at closing 29 care homes that had become unsustainable, they pursued an alternative programme that would address the shortage of care options whilst increasing provision for older people on middle incomes and those requiring social housing. The programme was not only aimed at meeting the needs of older people, but also those in Birmingham seeking family-sized homes, as the initiative sought to release these back into the market, including social housing underoccupied by older people.

The resulting partnership with the ExtraCare Charitable Trust saw a £200 million strategic programme to build five large scale Integrated Retirement Communities (IRCs) in Birmingham: New Oscott Village in Erdington , Pannel Croft Village in Newtown, Hagley Road Village and Bournville Gardens Village in Edgbaston (pictured) and finally Longbridge Village, completed in 2017. Homes became available for outright purchase, shared ownership purchase and affordable/social rent.

In total, the partnership resulted in a total of 1,168 units being built in five retirement villages.

Of these, 30% were for affordable/social rent, freeing up 342 units of social housing that were previously underoccupied for families requiring accommodation, providing a solution to both meet the needs of the ageing population and address the housing crisis facing younger generations.

The partnership also supported Birmingham’s diverse population. 70% of Pannel Croft’s residents are from Afro-Caribbean backgrounds, helping to facilitate a community for the older Afro-Caribbean population in Birmingham.

The subsequent health and social care benefits of the partnership, confirmed by a longitudinal study conducted by Aston University, resulted in savings for Birmingham City Council in social care costs, savings for the local NHS in Birmingham and savings for older people living in these IRCs – highlighting how increasing such partnerships can address both the housing and care challenges of an ageing population. The partnership also helped the Council to reach its own Health and Well-Being Board targets, with a 38% overall reduction in NHS costs and a 46% reduction in routine and regular GP visits for those living in the IRCs. Replicating this partnership across councils nationwide would tie in perfectly with Labour’s aims for both large-scale housebuilding and a National Care Service.

What next?

This example also demonstrates the wide-ranging socio-economic benefits that the building of social and affordable housing brings. By rolling out this partnership on a larger scale, Labour can facilitate a cyclical housing market where all older people who wish to downsize and move into accommodation such as IRCs can do so, and younger people and families can access family-sized homes. The role of IRCs in Labour’s National Care Service was noted in the Fabian Society’s recent report on this topic, which noted that “a major expansion of housing-with-care and supported living schemes” should be a “high priority”, recognising that “the UK has far less specialist housing for older people than many comparable countries, and what is available often does not provide sufficient support to prevent care home admissions when people’s needs grow more complex”. To remedy this, Labour should mandate that all local authorities have an older people’s housing plan which specifically mandates for provision of specialist housing and care for elderly.

Going further, Labour have recognised the urgent need to release parts of our greenbelt for development. Labour should aim to strategically release large parcels of land in conjunction with local councils, specialist housing providers and developers to develop these sites. In areas around cities, this could involve greenbelt land, allowing residents within cities to downsize and release valuable housing stock within urban centres. By pursuing this, Labour would be bringing more homes back into the market, helping a vulnerable demographic and providing solutions to both councils’ rising social care costs and our ever-growing housing crisis.

Joshua Lee works as a Senior Researcher for Henham Strategy where he specialises in housing and planning policy.

Sarina Kiayani is Policy and External Affairs Manager at ARCO and sits on the Fabian Society Executive Committee.

Rent to buy: the home ownership model with untapped potential?

The Levelling Up, Housing and Communities select committee is mid-way through an inquiry into shared ownership, which includes looking at the barriers to achieving full home ownership under the model and whether it is genuinely an affordable route to owning a home. Delve deeper into the terms of reference and it asks an interesting question: “are alternative schemes such as ‘Rent to Buy’ viable and do they offer more value for money?”

Rent to buy is not a new concept – the Coalition Government launched a £400m Rent to Buy scheme back in 2014 – but it has never really taken off in the way that other schemes to support first-time buyers have. From our experience on the ground, however, it feels like the tide is finally turning in favour of the tenure as more providers enter the market and an increasing number of local authorities adopt it as part of their housing mix.

This is perhaps a result of increasing recognition that the model has the benefit of tackling two key problems at once: in the vast majority of cases it provides new affordable homes to rent, whilst also providing a realistic route to ownership.

The Government describes Rent to Buy as helping tenants to save for a deposit to buy a home by offering properties at a discounted rent, normally 20% less than market rent.

Historically, it has been seen as a ‘niche’ product and there has been limited availability of it across the country, perpetuating the lack of awareness of the offer.

Now, with new entrants to the market, the sector is growing, but the challenge is that it is not homogenous. There are rent to buy products delivered by housing associations as part of their affordable rent provision; privately funded models that are included in local authorities’ affordable home ownership offer; and then rent to buy products that aren’t badged as affordable housing at all but are instead delivered as market homes. Muddying the waters further, the length of the rental period varies depending on the scheme – the 2014 scheme had a minimum of seven years renting, whilst the government website now states an initial rental agreement of just two. Some, like ours, offer a gifted deposit to add to renters’ savings, whereas others use the rental payments to count towards buying the property. This makes the sector hard to define in planning policy and confusing to navigate for local authorities, who are understandably wary of new providers in the market. Often, it is easier to stick to doing what they know.

However, as the cost-of-living crisis continues to bite, it is an attractive offer for renters who are struggling to save for a deposit and meets a major need in the market. Importantly, we have seen that it can successfully turn renters into homeowners.

As Keir Starmer looks for tangible ways to deliver Labour’s commitment to becoming the party of home ownership, he would be wise to look at how he can support growth of the rent to buy sector.

First and foremost, we know that saving for a deposit is one of the main challenges to getting on the housing ladder. In June, Zoopla found that the average deposit paid by a first-time buyer was £34,500, rising to £72,000 in the South East and over £144,000 in London.

For those who can’t rely on the ‘bank of mum and dad’, the difficulty is that often there is very little money left to put aside after paying rent and other monthly bills. The English Housing Survey notes that half of renters – some 2 million households – don’t have any savings at all. This rises to three quarters of those in the social rented sector.

This leads to a situation whereby the majority of first-time buyers come from the top two highest income groups, pricing out our nurses, teachers, retail and hospitality workers. This should not be the case. Workers across all income brackets should have a realistic prospect of being able to buy a home where they live. And we know that this is what they want; the aspiration to own has been constant at around 9 in 10 people for many years.

Labour will not be able to increase levels of home ownership and social mobility unless it addresses the deposit barrier. Rent to buy models do this in a way that Shared Ownership does not, by enabling tenants to move into the home that they will one day own without having to pay a deposit upfront, and instead being given the time and support to save for this.

The latest figures show that the average deposit for an initial equity stake under Shared Ownership was £20,800, putting it out of reach of the half of renters without savings. There is then the challenge of having to ‘staircase’ to full ownership, and the costs associated with this. Currently, comprehensive data on how many people reach full ownership and the time taken to do so does not exist, however, the House of Commons Library notes that the number of households staircasing to 100% in 2020-21 was equivalent to just 2.3% of all shared-equity homes owned by housing associations.

Homes England similarly does not collect post-sales information on grant-funded rent to buy homes; however under our model, 95% of renters have successfully become homeowners with a high street mortgage at the planned point.

On the question of whether rent to buy offers good value for money, we and other privately funded providers have proven that it is possible to deliver affordable home ownership products entirely without grant. We are fully funded by institutional investment such as major UK pension funds, meaning that there is no cost to the public purse whatsoever. As well as bringing more funding to the sector overall, using private investment to deliver affordable home ownership products enables local authorities to direct their grant funding to deliver more social housing; a win-win. This is an avenue that the Party seems interested to pursue, as the NPF document outlines that Labour will “encourage more private investment, properly regulated, in new supply”.

Rent to buy’s challenge is not that it is unviable, but that it has been small-scale and is not well known. With Help to Buy having ended, now is the time for it to be brought into the limelight and promoted as a major route to home ownership. Such a campaign from a future government would help boost local authority confidence and acceptance, encouraging more providers to the market and in turn increasing home ownership.

In addition, whilst privately funded providers do not require government grant through the Affordable Homes Programme, one of the main challenges is that local authorities are often reluctant to accept providers that are not government funded due to uncertainty over their standing. A Homes England equity programme for the rent to buy market would help to provide local authorities with confidence that the models had government support and had been assessed for quality and viability.

Following the G15 landlord Metropolitan Thames Valley Housing entering the rent to buy sector for the first time earlier this year, Inside Housing wrote: “Rent to Buy has been touted as a model that could replace shared ownership as the dominant affordable-ownership tenure.”

We believe that it can and that the Labour Party should be looking at how to make the most of its untapped potential.

Steve Collins

Steve is the Chief Executive at Rentplus, and has worked for more than 25 years in both public & private housing and development sectors

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