What will the Senior Living property sector look like when it matures?

Ahead of our Care and Retirement Living Conference in November, we caught up with Henry Lumby, Chief Development Officer at Amicala, and Executive Director of Allegra Care to discuss the recent spike in investment in the senior living (care homes and retirement living) sector.  

2021 was a record-breaking year for investment into the UK seniors housing market with institutional investors committing £1.4 billion, so why now are we witnessing such demand for senior housing investment opportunities?

With an ageing population and a heightened awareness of the senior living opportunity post-pandemic, those looking to expand their property portfolio have started paying attention to the possibilities of the care and retirement living landscape.

Full of possibilities, Henry describes Senior Living as ‘the next big growth sector, with potential to be larger than BTR and Student Housing put together’.


What are some of the key differences between care homes and retirement living?

Both care homes and retirement living options are geared towards creating a comfortable environment for seniors, but they are centred around slightly different age groups with different requirements when it comes to the care they receive.

While retirement living offers seniors an opportunity to create a home for themselves in a more community-based space with the peace of mind of care and support being delivered as and when they need it in their home, care homes have the purpose of providing a greater level of care to individuals that are typically older and higher up the acuity scale.

Despite this, Henry believes ‘there is space for significant growth in both sub-sectors of the senior living property sector’


While there is a lot of investment in traditional properties and BTR, retirement living hasn’t always been of high demand to those wanting to build their portfolio, why is that?

The government have long been seeking a solution to the adult social care crisis to no avail. Despite huge strains on the system throughout covid-19 and ongoing challenges surrounding planning and legislation, government think tanks have seemingly turned their focuses to integrated retirement communities as part of the solution, along with changes to the way that care is funded.

‘Momentum is building in the UK as there is a low provision of housing and a high demand.’

As such, we are seeing focus on changing planning policies that will support the concept of integrated retirement communities, as well as the aforementioned increase in investments in the sector that will undoubtedly enable growth. Consumers are benefiting from more choice in product, tenure, services and locations and this is translating into strong take up.


With all of the investments taking place, what will happen to care homes?

While we are likely to see a huge boost in developments that support retirement living communities, there will without a doubt still be a high demand for care homes due to the specialist care they provide in areas such as dementia.

Despite the pandemic demonstrating the pressure care homes were under, it has also highlighted the investment that is required for a number of existing care homes across the UK to properly support a functional care system. We are still year on year closing more beds than we open, yet we continue to see the over 85’s grow significantly.

‘The care sector provides a defendable sector from a need and demographics perspective and is expected to be an increasing focus of investors looking for stable investments post the retail sector downturn.’

An integrated retirement community equally offers a suitable option for both care home and residential living demographics, encouraging us to anticipate that this may be where the future of care is heading, and is the consumer take up very much supports that.


Are integrated retirement communities attractive to investors that aren’t looking to diversify their investment portfolio?

Though there is an attractive element to diversifying an investment portfolio, we are seeing several big-time investors utilising their knowledge and understanding of retail-driven and build to rent and hotel environments and making applications to senior living property investments.

Despite the fact that diversifying a property portfolio is attractive to investors, there are a number of additionally promising attributes to this sector in the current investor’s landscape, such as:

  • Long-term income
  • High demand
  • Greater choice and opportunity for seniors (guaranteed income by covering numerous price points)
  • Opportunities to provide specialist services (respite, end-of-life care etc.)
  • Providing a greater level of care to seniors


Will this surge in investment impact other sectors of the property market?

This surge will likely drive competitive pricing on land and at some point begin to impact the investments that are made into other common investment sectors such as BTR, but this should eventually equalise.

Beyond the impacts of investment for investors, this uptake in attention to the senior living property sector will undoubtedly begin to alleviate the care crisis.

Henry wrapped up by mentioning that ‘Both care homes and retirement living options have experienced stunted growth in the years leading up to and throughout the pandemic, but they are emerging stronger than ever and I’m really excited to see what the future holds.’

Have you considered investing in the Senior Living property sector? Let us know on Twitter!

Want to hear more about investment opportunities in Care and Retirement Living? Check out our upcoming Retirement Living Property Conference and get yourself tickets to be a part of the action on the 23rd of November 2022.