UK retirement housing: market update

The latest trends in the UK’s retirement housing market

Written in line with our editorial policy.

The retirement housing market in the UK continues to evolve, reflecting changing demographics and lifestyles among older adults. 

As we move through 2024, several key trends and developments are shaping the retirement housing landscape. 

It’s a sector that has grown significantly, driven by increased demand for specialised accommodations for retirees. The UK’s ageing population increasingly requires accessible housing with community support and amenities as retirees seek independent living with social and leisure opportunities.

Here, we explore the latest in the UK’s retirement property market.

Market trends

The retirement property sector has seen significant growth in recent years with increased demand for specialised accommodation that caters to the needs and preferences of retirees. Emerging as one of the fastest-growing segments within the UK’s property market, its growth has been driven by several key factors:

1. Demographic shifts. The fact that the UK has an ageing population is a primary driver of demand for retirement housing. As people live longer and healthier lives, there is a growing need for housing options that offer accessibility, community support and amenities tailored to older adults.
2. Lifestyle preferences. Retirees today are more active and socially engaged than previous generations. They seek housing solutions that enable independent living while providing opportunities for social interaction and leisure activities.
3. Healthcare and support services. Many retirement housing developments now include on-site healthcare facilities or easy access to medical services. These are increasingly attractive to older adults looking to maintain their independence while having peace of mind regarding their health needs.

Average prices

The cost of retirement housing varies significantly depending on location, amenities and the level of care provided. As with any property type across the UK, prices for retirement properties can range from modest to premium depending on the location, desirability and local amenities.

In sought-after locations or high-end retirement villages offering extensive facilities such as spas, restaurants and 24/7 concierge services, prices can soar. They often far exceed the £281,373 average cost of a UK property.

According to the retirement property comparison website Lottie, the average cost of buying a one-bedroom retirement apartment in London is £708,200 while a two-bedroom apartment costs £799,313. That makes it the most expensive place to purchase a retirement home.

The cheapest place to buy a retirement apartment is in East Anglia, where a one-bedroom apartment is £213,950 on average, while a two-bedroom apartment costs £317,700.

In the South West, a one-bedroom apartment will set you back £260,082 on average, while a two-bedroom apartment costs £403,660.

A little more expensive are properties in the South East, where a one-bedroom apartment averages £342,900, and a two-bedroom apartment costs £478,696.

Whilst up in the North of England, which covers both the North East and the North West, a one-bedroom retirement apartment will cost £215,922 on average, while a two-bedroom apartment averages £304,135.

Remember, UK retirement properties aren’t usually financed by a mortgage – you often need to be a cash buyer. However, this isn’t normally an issue for a homeowner who can sell their existing home if they have paid off their mortgage.

Demand for new properties

Previously, the growth of the retirement housing sector has been constrained by supply and demand dynamics, resulting in a slower pace of development. 

Speaking to Business Leader, Paul Teverson, Director of Communications at McCarthy Stone, explained that demand within the retirement community sector could support between 30,000 and 50,000 new properties annually. However, current construction levels are significantly lower, with only about 6,000 new properties being built each year.

He cites retirement property company Audley as an example of rising demand. They saw an 11% increase in new units built in 2022 compared to 2021, totalling 167 units. They also have plans for an additional 286 units currently in the planning stages, with approximately £240 million allocated towards new village constructions.

New developments

The UK’s retirement housing market is set to expand further with new developments catering to different preferences and needs of retirees across the UK. For instance, plans have been unveiled for a new retirement flats project in Sheringham, Norfolk. 

Located on the esplanade, this development will offer 41 retirement flats, providing residents with panoramic sea views and easy access to local amenities. This project reflects a growing trend towards coastal retirement living, combining scenic beauty with convenient access to services.

In addition, another notable development is underway on the site of a former historic deer park in Kent. This project aims to integrate modern retirement living with the preservation of historical heritage, offering retirees a blend of tranquillity and community.

Plans have also been approved for a new development in Watlington, Oxfordshire. Situated on Shiburn Road, this project will introduce a selection of retirement homes with a focus on accessibility and community integration. The development aims to provide modern amenities while complementing the local environment.

Future outlook

Looking ahead, it would not be unreasonable to expect the UK retirement housing market to continue growing as the population ages and demand for specialised housing solutions increases. 

Developers are likely to focus on integrating innovative design features, technology-enabled services, and sustainable practices to meet the evolving needs of older adults.

What can be said for certain is that the market has come a long way in recent years, offering a range of attractive options available across the UK. Many retirees can now access housing solutions that align with their preference for an independent and fulfilling retirement experience.

Sources:

Average cost of a UK property £281,373: UK House Prices 2024 data. Land Registry. Accessed 17 July 2024.

Average cost of buying a retirement property: The Average Retirement Home Costs in the UK (2024). Lottie. Accessed 17 July 2024.

Demand could support between 30,000 and 50,000 new properties annually: Retirement homes: The UK’s fastest growing non-tech sector. Business Leader. Accessed 17 July 2024.

About Clare Yates. With over a decade’s experience writing about later life financial planning, Clare offers a wealth of knowledge about equity release, pension annuities, wills, LPAs and more. When she isn’t writing, Clare likes to spend her time baking and going on walks with her husband, two children and their rescue dog. Follow Clare on LinkedIn