• Castleoak

Reimagining later living and care: starting with the consumer

Updated: Oct 14, 2020

Paul Foster - Chair at Castleoak

Last week’s analysis from Knight Frank predicting 10 % growth in the UK’s senior living sector by 2025 makes for interesting if unsurprising reading, and brings some of the challenges into sharp focus.

But it is only when you take these findings together with its May report that 6,500 care homes could be at risk of closure over the same period, that wider, societal solutions can begin to emerge.

And, as with all markets, that starts with the consumer.

In the broadest terms, at retirement age, we are just as eclectic a population as any other social group: the significant contributory factors to our housing requirements at this age are that, statistically, our working lives will diminish and our care needs will increase. We also continue to want to live in or own homes for as long as possible as our care needs potentially increase over time.

Assisted living

Our starting point, then, is to create later living homes that help people remain in them, and that support their care needs technologically as well as the provision of domiciliary care. We need the smartest designs that will not only enable support, but also design out cost - so that more can be delivered.

A big enough decision in so-called normal times, the downsize to assisted living needs little reason to prompt hesitation or pause decision-making. So we need to create straightforward tenure models that make it as easy as possible for people – and the market – to move. Confusing arrangements and terminology – event fees, anyone? – don’t help in an economic climate where people’s main assets – their family homes – may be under threat of a decline in value as recession bites in the wake of the Covid-19 pandemic.

Care homes

Only the most intensive care requirements would then necessitate a move into a care home – and with an increasing 85+ population, this need will remain significant.

The Covid-19 pandemic has magnified an already challenging reprovisioning issue. Where previously many in the sector estimated around 50% of care homes were in need of modernisation, post Covid-19 that figure could be more likely to be 75% when we look at what is now required to ensure people can care and be cared for safely.

There are several considerations around this with regards to buildings: corridor widths, the capacity to accommodate visitors safely, social distancing within communal spaces, on-site staff accommodation and so on. The single most significant measure, however, may be the safety and wellbeing benefits of ensuite wetrooms. An informed estimate is that only around 25% of care homes currently have these in place.

But how does the sector begin to afford reprovisioning 75% of care homes, especially in the absence of a funding model for the mid and lower end market majority component?

Firstly, we must propose models that encourage long-term investors to fund the reprovisioning. A long-term design-build-finance-operate model where the care home operator has a 25 to 30-year concession with the developer and funder may be the answer. But, crucially, we should learn from the mistakes of the past, creating sustainable, affordable solutions where the operators have ownership of the asset at the end of the concession.

So, while this week’s research predicted a 10% growth in the later living sector, the demand should be much, much more. Now is the time for all of us who provide built assets to the later living and care markets to work together both to reimagine how we do that and to raise significantly more capital investment into the sector. Then we will be in a position to serve residents, operators and, ultimately, society better.

Paul Foster


Read more from Knight Frank here


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