While the UK’s Housing with Care market is currently small, it holds great potential for growth. Measures such as the Law Commission’s clarifications around event fees and the government’s statement on ground rent, have provided the confidence that providers, operators and investors need to increase their contribution to the market. Demographics provide natural impetus for the market to grow, and this could be supported further by leasehold reform and regulatory reform providing consumers with greater confidence in what the housing with care sector offers.
This report provides the information that housing associations, independent sector investors, developers and operators need to navigate this fast-growing market.
Valued at £2.6 billion, and amounting to more than 77,000 units in 2018, the Housing with Care UK market is at a point of inflexion. However, it is a market that is far from reaching its full potential, currently reaching just 2.4% of its addressable market.
With a predicted addressable market of 3.2 million people by 2030, there is the potential for the housing with care market to continue to enjoy strong growth. In the past ten years, this has seen the value of property alone in the sector triple.
Demographics will continue to be a key driver, especially as the over 75 age group is not only growing in size as a proportion of the population, but also only half of that age group is expected to be healthy and disability free into old age. At the same time, the property wealth of this demographic means it has more to invest in care and broader aspirations about how they want to live in their old age.
Furthermore, people are realising that earlier personal and informal care improves and lengthens healthy lives. Local authority commissioners are recognising that early care in housing with care settings reduces costs.
What the report covers
- Market and demand drivers
- Revenue, Operating and Investment Models
- Sector size, growth and performance
- Sector players
- Investors
- Advisory organisations
- Government policy and regulation
- Market potential
- Financial Appendix
Who is the report for
- Extra Care & Retirement Community Operators
- Care & Support Providers
- Homecare Agencies
- Local Authorities
- Housing Associations
- Social Landlords
- Investors
- Banks
- Private Equity
- Architects
- Property Developers & Consultants
- Central Government
- Think Tanks
- Lawyers
- Management Consultants
Table of Contents
LIST OF TABLES
LIST OF FIGURES
EXECUTIVE SUMMARY
1. MARKET
1.1 Definitions
1.1.1 Other Definitions
1.1.1.1 Extra Care Housing
1.1.1.2 Retirement Villages
1.1.1.3 Close Care
1.1.1.4 Non-Housing with Care
1.1.1.5 Average Apartment and Building Sizes
1.1.1.6 Communal Facilities
1.2 Market Segmentation
1.2.1 Housing Segments
1.2.2 Segmented by Tenure
1.2.3 Segmented by Owner
1.2.4 Segmented by Geography
1.2.5 Available Apartments per Capita by Region
1.3 Market Size
1.3.1 Real Estate
1.3.2 Services
1.4 Market Growth
1.4.1 Market Value Growth
1.4.2 Market Volume Growth
1.5 Funding
1.5.1 National Policies
1.5.1.1 Funding Supported Housing: Policy Statement and Consultation
1.5.1.2 Previous Local Housing Allowance Policy
1.5.1.3 Sleep-in and National Living Wage
1.5.1.4 Wage Costs
1.5.2 Government Capital Funds
1.5.2.1 Better Care Fund
1.5.2.2 Care and Support Specialised Housing Fund (CASSH)
1.5.2.3 The Mayor’s Care and Support Specialised Housing Fund
1.5.2.4 Homes and Communities Agency
1.5.2.4.1 HCA Shared Ownership and Affordable Homes Programme 2016 to 2021
1.5.2.4.2 HCA Affordable Homes Programme 2015 to 2018
1.5.3 Government-Backed Extra Care Schemes
1.6 Demand Drivers
1.6.1 Demographic Change
1.6.2 Marital Status
1.6.3 Trust in the Offer
1.6.4 Word of Mouth
1.6.5 Wealth – Current Home Equity and Ownership
1.6.6 Pensioner Income
1.6.7 Inheritance
1.6.8 Problem Solving Attitudes
1.6.9 Location
1.6.10 Life Expectancy at 65
1.6.10.1 Dementia Prevalence
1.7 Operating and Investment Models
1.7.1 Business Models and Offerings
1.7.2 Revenue Models
1.7.2.1 Housing with Care
1.7.2.2 Differences in Fees and Payments
1.7.2.3 Event Fees
1.7.2.4 Sheltered Homes/Retirement Homes
1.7.2.5 Staying in Home with Domiciliary Care
1.7.3 Operating and Investment Models
2. POLITICS AND REGULATION
2.1 Key Messages
2.2 Legislative Changes
2.3 Conservative Party Manifesto
2.4 Labour Party Manifesto 2017
2.5 National Policies
2.5.1 Supported Housing
2.5.2 The Perceived Problem of ‘Under Occupation’
2.6 Local Authorities
2.6.1 Local Development Framework
2.6.2 Community Infrastructure Levies
2.6.3 Section 106 Agreements
2.6.4 New Homes Bonus
2.6.5 Extra Care Private Purchase
2.7 Legal Environment
2.7.1 Planning Regulations
2.7.2 Event Fees
2.7.2.1 The Law Commission – Findings and Impact
2.7.2.2 The Law Commission Interim Progress Report
2.7.2.3 Earlier Office of Fair Trading 2009–2013 Activity
2.7.3 Tenancies and Tenure
2.7.3.1 Assured Shorthold Tenancies
2.7.3.2 Rights to Buy and to Acquire
2.7.3.3 Commonhold
2.7.3.4 No Fault Right to Manage
2.7.4 Benefits
2.7.5 Regulatory Risk
2.8 Legal History
2.8.1 The Care Act 2014
2.8.2 The Welfare Reform Act 2012
2.9 Regulators – England
2.9.1 Care Quality Commission (CQC)
2.9.1.1 CQC Market Oversight
2.9.1.2 CQC Regulatory Developments
2.9.1.3 CQC Implementation Scheme April 2018
2.9.1.4 CQC May 2016–2021 Plan
2.9.2 Homes and Communities Agency
2.9.3 Scotland
2.9.3.1 Scottish Supported Housing
2.9.3.2 Consultation on Standards
2.9.3.3 Care Standards Comparison
2.9.4 Wales
2.9.4.1 Regulation and Inspection of Social Care (Wales) Act 2016
2.9.4.2 Impact on Extra Care in Wales
2.9.5 Northern Ireland
2.9.5.1 Regulation 133
2.9.5.2 Registration of NI Domiciliary Care Managers
2.10 Housing Standards
2.10.1 Wheelchair Housing Features
2.10.2 Mobility Housing Features
2.10.3 Lifetime Homes
2.10.4 Care Standards Act 2000
2.10.5 Local Planning Authority
2.11 Staff Registration
2.12 Industry Associations and Think-Tanks
2.12.1 Associated Retirement Community Operators (ARCO)
2.12.1.1 ARCO Vision 2030
2.12.2 The Association of Retirement Housing Managers
2.12.3 The Association of Residential Managing Agents (ARMA)
2.12.4 The Elderly Accommodation Counsel (EAC)
2.12.5 National Housing Federation
2.12.6 The Retirement Housing Group
2.12.7 Other Relevant Organisations
2.12.7.1 Age UK
2.12.7.2 Better Retirement Housing
2.12.7.3 The Equity Release Council
2.12.7.4 The Housing Dementia Research Consortium
2.12.7.5 Independent Housing Ombudsman Service
2.12.7.6 The Local Government Ombudsman
2.12.7.7 The First-Tier Tribunal (Property Chamber)
2.12.7.8 The National Association of Almshouses/Almshouse Association
2.12.7.9 The Scottish Federation of Housing Associations
2.12.7.10 The United Kingdom Homecare Association (UKHCA)
3. PAYORS
3.1 Key Messages
3.2 Payor Overview
3.3 UK Government Benefits Commonly Available to Payors
3.3.1 State Pension
3.3.2 Pension Credit
3.3.3 Housing Benefit
3.3.4 Attendance Allowance
3.4 Local Authority Market Position Statements
3.5 Payment Model
3.6 Event Fees
3.6.1 Event Fee Valuation
3.6.2 Event Fee Cashflow – Resale Values
3.7 Rental Agreement Types
3.7.1 High End Rental Offerings
3.8 Funding
4. MAJOR PROVIDERS
4.1 Key Messages
4.2 Operating Models
4.3 Developers
4.4 Operators
4.5 Care Providers
4.6 Housing Associations
5. INVESTORS
5.1 Key Messages
5.2 Investors Overview
5.3 Investment Models
5.4 Investors
5.4.1 Octopus Healthcare
5.4.2 Legal & General
5.4.3 AXA Investment Managers
5.4.4 Apache Capital
5.4.5 Moorfield Group
5.4.6 Bupa
5.4.7 Oaktree Capital
5.4.8 Bridgepoint
5.5 International investors
5.5.1 Auriens
5.5.2 City Development Ltd (CDL)
6. MARKET POTENTIAL
6.1 Key messages
6.2 Future Need and Prospects
6.3 Market Forecast
6.4 International Comparisons
6.4.1 Australia and New Zealand Overview
6.4.2 New Zealand and Australia Market Size and Operators
6.5 Growth Constraints
APPENDICES
APPENDIX 1. LAINGBUISSON GLOSSARY
APPENDIX 2. OTHER DEFINITIONS
APPENDIX 3. HOUSING LOCATIONS
APPENDIX 4. PROVIDER PROFILES
APPENDIX 5. SECTOR ACTIVITY BY MONTH
APPENDIX 6. BIBLIOGRAPHY
APPENDIX 7. OFFERINGS
APPENDIX 8. MARKET POSITION STATEMENTS
APPENDIX 9. CARE QUALITY COMMISSION FACTSHEET
APPENDIX 10. SCOTTISH CARE INSPECTORATE FACTSHEET
APPENDIX 11. SURREY COUNCIL
APPENDIX 12. BRANDS UNDER CQC MARKET OVERSIGHT POWERS AS AT MARCH 2017
APPENDIX 13. FINANCIAL APPENDIX
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