Later life living – turning a corner for investors?
By Daniel Austin, CEO and co-founder at ASK Partners
By 2072, almost 30% of Britons will be aged 65 or over. This stark demographic shift is already taking shape, with profound implications for the housing market. Despite an estimated shortfall of at least 4.3 million in the UK today, less than 1 million are specifically designed for later life living, and this figure excludes full-service care homes. The opportunity seems clear: provide quality housing for older generations, free up traditional family homes for younger buyers, and potentially ease price pressures across the market.
Yet despite these apparent benefits, the sector has struggled to gain traction. Unlike countries such as Australia, New Zealand, and the US, where dedicated retirement living regulations have unlocked significant investment, the UK lacks a clear legislative framework. Currently, later living falls under the broad C2 planning classification, a catch-all category that lumps together nursing homes, boarding schools, and even detention centres. Crucially, it does not adequately cover retirement developments where no formal care is provided, highlighting a persistent policy vacuum. As a result, the focus has remained on end-of-life care homes rather than purpose-built communities for healthier, active retirees looking to downsize without sacrificing lifestyle.
Negative public perception has further dampened investor appetite. High service charges, often compounded by opaque exit fee structures payable on death, have left families unable to sell properties while charges continue to mount, eroding any inheritance left behind. Many buyers also struggle to understand complex legal arrangements underpinning these developments, with leaseholds and restrictions creating barriers to resale. For lenders, the lack of robust resale data and uncertain time-to-sale remain key concerns, making it difficult to structure financing confidently.
Nevertheless, the industry is slowly responding to these challenges. Some developers have introduced exit fees as a means to keep annual service charges lower, effectively spreading lifetime costs more evenly. Others are expanding rental options, allowing residents to ‘pay as they go’ rather than buying a niche asset they may later struggle to sell. However, these rental prices are typically high – a shock for many retirees unaccustomed to current market rents, having paid off their mortgages decades earlier. For the model to appeal widely, these schemes need to be restructured in ways that provide security of tenure while avoiding unsustainable rent inflation.
Meanwhile, changes to planning policy are removing some of the limited development advantages that previously existed. C2 classifications have historically provided exemptions from affordable housing contributions, supporting viability for specialist retirement schemes. The erosion of these benefits is making the economics of development less attractive. Combined with poor publicity, opaque legal models, and limited specialist financing options, developers have little incentive to enter or scale up in the sector.
There are, however, reasons for cautious optimism. Demographic pressures are forcing policy conversations to accelerate, and institutional investors are increasingly drawn to long-term demographic plays, particularly those with inflation-linked cashflows and strong ESG credentials. Countries like Australia and New Zealand have shown that when underpinned by clear regulation, transparent consumer protections, and viable financing models, later life living can thrive as a commercial sector while delivering significant societal benefits.
For the later living model to work in the UK, a fundamental shift is needed. Financing must adapt, backed by clearer data on resale performance, exit fees, and time to sale. Planning frameworks should recognise later life communities as distinct from both traditional housing and care homes, providing clarity and certainty for developers and investors alike. Consumer protections must be reformed to rebuild public trust, ensuring residents and their families are not left with unforeseen financial liabilities.
Without such structural changes, later life living risks remaining a missed opportunity: for investors seeking resilient long-term returns, for older generations in need of appropriate housing, and for a country urgently trying to unlock more family homes to ease its deepening housing crisis. With demographic realities becoming impossible to ignore, the sector stands at a turning point, if policymakers, investors, and developers are ready to act.
You May Also Enjoy
Breaking Property News 18/09/25
Energy Rules Without Power: Tenants and Landlords Both Question EPC Impact
New Build Home Enquiries Double in Summer 2025
Residential Performance Dives, Dragging Entire Sector Down
80% of maintenance calls happen out-of-hours
