More homes for seniors needed to cope with ageing population
A major uplift in public subsidies to support private investment of more affordable homes for rent, student and seniors’ accommodation is being called for by the British Property Federation.
It has estimated at least 100,000 new homes a year need to be built across the sector yet at present this is restricted to 35,000.
The British Property Federation, BPF, is calling for a future government to increase public subsidies by up to 14bn which it claims would unlock £10bn of institutional capital investment.
BPF policy director Ian Fletcher said: “Pension funds and other sources, of institutional capital are attracted to these sectors as they offer secure long-term income, but the next Government must do more to give them the confidence to invest.
“There are a number of funding mechanisms government can introduce that will help de-risk schemes and support delivery when economic and market conditions are more challenging.”
The BPF wants a future government to introduce longer-term rent settlements to support security of income and viability. Currently, these settlements last for just a few years and are linked to the consumer price index.
They also want to see a level playing field for ‘for profit’ registered housing providers to enable closer collaboration between institutional investors and housing associations.
Research by York University, published in 2018, has estimated that 1.2m are on council waiting lists.
The BPF argues that as housing associations have reached their borrowing limits at least £10bn of institutional investment is needed to address the shortfall in affordable housing.
This week it released a residential manifesto for delivering 30,000 build-to-rent, BTR, homes a year and removing the barriers to providing student accommodation and older peoples’ housing.
Currently there are more than 100,000 BTR homes with 160,000 in the pipeline but the BPF has said the UK lags the US and Australia in delivering professionally managed homes at scale.
The BPF is calling for the next government to exempt new developments of more than 100 homes from stamp duty which they claim would create more liquidity in the market. They would like local authorities to be required to assess the need for professionally rented homes in local plans.
They also want an extension of the private rented sector housing guarantee scheme allowing BTR developers to raise debt with a government guarantee to reduce borrowing rates.
More homes for seniors needed to cope with ageing demographics
At present, there are only 602,633 senior housing homes but the BPF estimates that 50,000 new units a year could be delivered with £65bn of private capital investment.
“An undersupply of purpose-built housing for older people creates pressure on wider housing supply by restricting down-sizing and ultimately increases the burden on the social care system,” said Mr Fletcher.
The BPF is also calling for a national strategy for housing the UK’s ageing population of 12.9m people over 65 that would include health and social care needs.
It has also highlighted the UK’s reputation as a world-class place to study and that currently 710,000 students are housed in purpose-built student accommodation. It wants councils to evaluate student housing needs in local plans and for universities to include it as part of their growth and funding plans. It also would like affordable student accommodation to be exempt from the community infrastructure levy in line with affordable housing.
Brokers Hank Zarihs Associates said development finance lenders supported making it easier to build new homes for these sectors.
The National Federation of Builders said that housebuilding was a vital contributor to the UK economy and that more should be done to support supply. Office of National Statistics data showed construction output in April dropped by 1.4 per cent with a 2.2 per cent decrease in the three months to April 2024.