Wed 1 Aug 2007
The Future of Retirement (part 2)
Following on from last month, David Hoppit talks to some of the movers and shakers in the retirement development business about what the future holds for this fast-growing sector of the housebuilding industry.With an ageing population, building retirement, or age-exclusive, developments is certainly the business to be in, but, as increasing numbers of specialist developers are realising, the demands of the retired population are changing as rapidly as it is growing.
Jon Gooding, head man at Retirement Villages, admits we will all have to rethink what we mean by "older generation".
"Guidelines for GPs now define 'elderly' as 75-plus, but even at that age some people would be offended by the term. Even those who are physically frail have a mindset or attitude that means their expectations will be very different from former generations.
"Our customers want space - lots of it! They are part of the most affluent generation of all time and they are accustomed to living well, in high-quality accommodation, so when they consider a retirement village or assisted living development they won't consider being shoe-horned into two or three rooms," says Gooding.
He said the most popular units were always the larger ones, some with 1,300 square feet of floor area. At the planning stage are even larger units, one measuring 3,000 square feet.
"Our customers are prepared to spend £500,000 to £750,000 on the homes with high specification and they want to explore all the financial options; in particular, means by which inheritance tax liability can be removed or at least reduced," adds Gooding.
"As the market evolves these aspirations can only get greater. Already our 'silver surfers' demand high-speed broadband and all the advanced television and telephone products. It is also vital to have easily available high-quality domiciliary care services, to enable couples to stay together in the event of one of them becoming ill or suffering dementia.
"Above all, our residents want to enjoy themselves. The emphasis on life will be fun. Forget 'God's waiting room' - this is the rock'n'roll generation and they want to party!"
English Courtyard, founded by Noel Shuttleworth in 1979 when he could find nowhere suitable for his mother's retirement, was and still is the leader in the provision of upmarket developments - and Noel has moved into one himself.
Since that first development, in Pewsey, the company has completed about 900 properties around the country and its philosophy is still to provide residents with security, pleasant surroundings and above all space. The average size of a new home built in the UK today is, apparently, 893 square feet; and all but one of English Courtyard's properties completed in the past three years exceeded that size.
The firm was the first to realise that residents do not want to be reminded of advancing years, so grab rails, pull cords and emergency switches were never in evidence. Such designs that were there were subtle, such as sensibly placed power points and flush shower trays.
Others have watched and caught up, so the firm is not relaxing. Carol Geddes, English Courtyard's marketing manager, says buyers these days take such things as fitted kitchens, bathrooms and bedrooms to be standard.
"We are therefore constantly examining ways of improving specification and making life that bit better for residents. Most now expect to have a study and home office, so setting up the home computer should be on a par with unpacking the kettle.
"They certainly want to be able to lock up and leave their home, and more and more this will become a feature of developments. And they will want to keep in touch with home via a laptop."
Another player at the top end of the market is Beechcroft. Angela South, sales and marketing director, looked into her own crystal ball and saw future retirement developments that resembled hotels, with 'assisted living' facilities for those who required them. These will, of course, have the same 'lock-up-and-leave' facilities, with estate managers to care for both property and gardens.
The government's tedious fixation on developments with a social mix of units is, she says, obliging firms such as Beechcroft to re-examine the future.
"The older generation will be looking for leisure facilities, with golf courses, spas and swimming pavilions becoming the norm. Given the existing UK planning regulations this type of retirement village may have to be located elsewhere in Europe, but providing the same facilities as those here," she says.
In addition to continuing to provide spacious and comfortable homes for the older generation, Beechcroft is also exploring the scope for building child-free developments for the increasing number of buyers under the age of 55 who want to live among like-minded people in a well-maintained development. They welcome Beechcroft's special projects developments, which have a covenant that prohibits under-16s living there full time.
No firm has more experience of the 'grown-up' market than McCarthy and Stone and chief executive Howard Phillips is already planning for the next two decades.
"The growth in the elderly population will continue unabated over the next 20 years, during which time another 2.5 million pensioners will emerge, outnumbering even those in the 20 to 40 age group. The majority of these will be homeowners who will want homes tailored to their needs, aspirations and accumulated wealth," predicts Phillips.
He adds: "With William Hill putting his money on David Cameron at the next general election we have to consider the effects of a change of government. Cameron believes that individuals and families are better at making decisions than the state; and private provision such as ours fits his vision.
"However, we do not share his enthusiasm for 'homes for life'. Living alone in a property, however well adapted, does nothing to tackle loneliness, the great enemy of later life. Companionship is one of the main attractions of our kind of development.
"Also, the cost-cutting measures by local authorities that have drastically reduced home help and social services for all but the most needy cases have fuelled demand for the 'extra care' model that we are developing in our assisted living division.
"Residents should not have to sell the family silver to pay residential home fees when assisted living schemes such as ours can provide a better lifestyle at lower cost while also preserving their equity in property."
One of the new boys, but claiming to be one of the country's fastest growing firms, is Churchill Retirement Living, in every sense the son of McCarthy and Stone, founded as it was by John McCarthy's sons.
Spencer McCarthy, chairman and managing director, says demand for purpose-built retirement property has never been greater and it is set to continue to rise. By 2031 his surveys saw a 73 per cent increase in retired buyers flooding the market, and in only 13 years demand is expected to accelerate by at least 35,000 homes.
As with his father's company, Spencer McCarthy sees proximity to selected town centres as essential to owners' peace of mind. Security and companionship are also at the top of buyers' shopping list and quality and craftsmanship within the development is almost taken for granted these days.
"Our lodges these days have to offer so much more than just somewhere to live. Residents enjoy independent living combined with safe and secure surroundings and companionship," says Spencer McCarthy.
He adds: "There are now many different levels of requirement and I see the growth in the number of providers as a good thing, giving buyers a wider and wider choice of options from which to choose.
Another relative newcomer to the market is Golden Living, steered by managing director Trevor Walters Thompson.
"The numbers of developers and customers has changed and risen dramatically in the past few years, but we see a significant consolidation and shake-up in the market in the near future, with the focus being on specialists who have a comprehensive understanding of the market as a whole and of customer's individual needs," he says.
Rising property values have largely fuelled the market, with most buyers now able to afford to dictate where and how they want to spend their retirement. The firm is currently building in the north-east and Lincolnshire and believes it will be a "major player" within five years.
Another firm that is already a big hitter in the market is Pegasus, which provides homes for independent living that cater for people who want to enjoy life at home or gallivant around the globe - or both. Most developments provide facilities for social events, as well as hobby and craft rooms and fitness suites.
Carolyn McQuitty, sales and marketing director, says: "Just ten years ago most of our buyers moved within a five- or ten-mile radius of the family home. These days more and more are uprooting and relocating all over the UK. This trend will continue, with some looking overseas for investment as well."
So there it is - a life of fun, travel, wine and roses awaits us all, provided we haven't squandered the pension and rented the family home all our lives. Were I a betting man (which I am a bit!) I would have a flutter on a few shares in these companies when they go public - old age is, we hope, one of the few certainties in life.
First published in Show House Magazine August 2007.
The greatest care has been taken to ensure accuracy but some information contained within this article may have changed since it was first published.
Posted by David Hoppit
in Beechcroft, Churchill Retirement Living, English Courtyard, Features, Golden Living, McCarthy and Stone, Pegasus, Retirement Villages on Wed 1 Aug 2007
Have your say and comment on this article