Paul Teverson at McCarthy & Stone presented to the Extra Care Annual Conference in December 2012 and provided an outline of the opportunities and challenges of developing housing in the retirement sector. The presentation was delivered in partnership with Prof Andrew Kerslake of the Institute of Public Care at Oxford Brookes University.

1. Understanding our market:
planning ahead

2. Care and Support White Paper
Unique in that…
 First real legislative acknowledgment of the role
played by the market in delivering social care.
 The importance of housing (mentioned no less
than 53 times)

3. Care and Support White Paper
 “The government supports the diverse range of
care providers that currently offer care and
support, including user and carer led
organisations, small and micro enterprises and
social enterprises.
 To strengthen this diversity, the Government
will introduce a duty upon local authorities to
promote diversity and quality in the provision
of services.
 To help local authorities carry out this duty,
we are offering support to every local authority
to create a market position statement or to
develop their existing one.”

4. Care and Support White Paper
 Government announced a consultation this
Autumn to cover three areas:
 Strengthening and clarifying the
responsibilities of local authorities in relation
to the market.
 The collection of better market and provider
intelligence.
 To what extent further, targeted, action to
address provider distress and failure is
necessary.

5. Care and Support White Paper
 “Housing plays a critical role in supporting people
to live independently, and helping carers to
support others more effectively.
 However, the NHS Future Forum reported that the
NHS spends £600 million each year treating
people due to severe hazards in poor housing, the
vast majority of which are associated with falls.
Unsuitable or badly maintained housing is putting
the health and wellbeing of thousands of people
at risk”.

6. Impact of the current economic
situation on the market?
 Cheaper to borrow money now but harder to
obtain due to banks caution.
 Low interest rates mean people eat into their
capital quicker.
 Harder for older people to sell their property
which may make it harder for people to move.
 If in the future there are labour shortage and / or
wage inflation it will hit social care first and
foremost, given it is a minimum wage based
industry.
 An upturn may tempt many small residential care
providers to sell, leading to less supply/ more
market consolidation.

7. Current drivers behind the market?
 High level of home ownership amongst older
people. Around 75-80% of older people are home
owners, half of all housing equity is held by the
65and over.
 An old age population that is more used to
moving house based on life circumstances.
 New DH funding imitative.
 Sheltered housing estate the single biggest asset
held in trust for older people in this this country.

8. Current drivers behind the market?
 High start up costs.
 General level of state support in England & Wales
diminished.
 Little knowledge of what works or what the public
desires in a very young market.
 Poor image for sheltered housing.
 Unreceptive planning environment.

9. What do we know about what
consumers want
 Location
 Design and desirability
 Space
 Low maintenance
 Safety and security
 No hidden prices and affordability

10. IPC’s role in development
 IPC leading on the national ‘Developing Care
Market’s programme for DH and ADASS.
 Publishing three papers today (copies available
on the IPC stand).
 Delivered the SHOP guide as a step towards
wider thinking about Housing choices for older
people and how they might be delivered.
 Engaged with providers and strategic
commissioners in exploring how the supported
housing market might best be encouraged and
stimulated.

11. What is market facilitation?
 Based on a good understanding of need and
demand, market facilitation is the process by
which strategic commissioners ensure there is
diverse, appropriate and affordable provision
available to meet needs and deliver effective
outcomes both now and in the future.

12. The Market Facilitation
Framework

13. Market intelligence
Demand
 What kinds of numbers where?
 How is demand currently being met?
 What does the future demand for housing
suitable for older people look like?
 What kinds of housing do older people want,
under what kinds of tenure, at what sort of price?

14. Market intelligence
Supply
 What kinds of housing where ? What do we do
with what we have got?
 What kinds of housing where in relation to which
populations?
 What understanding of consumer behaviour? How
much market testing has gone on?
 What are the blockages to be overcome and how?
 Housing in relation to planning, health and care.

15. Market structuring
 Stimulate the consumer market with a taste of
what might be possible.
 Get elected members in on the vision for the
future.
 Get the offer to developers right.
 Getting health on board.
 Planning!

16. Market intervention
 Get support from across the sector for a vision of
older peoples accommodation.
 Provide a stimulus package to encourage the right
developments in the right location.
 Offer flexible tenure arrangements to suit the local
market.
 Ensure that housing takes demand out of the
system

17. McCarthy & Stone: our place in the
market
 Currently 560,000 specialist independent living
dwellings for the elderly (2% of housing stock).
 Of this, 106,000 units are for owner occupation.
There are 35,000 Extra Care units (90% rented).
 Although we have a 70% market share, our market
is small – we sold just 1,300 units in 2011.
 Two main model types. Our Assisted Living Extra
Care model has evolved since launching in 2000.
 Ownership-based model (125-year lease).
 Increased focus on management services and on-
site personal care / support.
 Reinforce the importance of site location.

18. Our place in the market
Figures: Elderly Accommodation Counsel

19. Who are our customers?
 Owner-occupiers looking to continue ownership.
 Majority are single, widowed women, but this is
changing.
 Average purchase age is 78, rising to 83 in Extra
Care schemes, and rising. Most move from five
miles away.
 Although older people are less inclined to move,
over 130,000 still change homes each year in UK –
therefore the market exists.
 Key reasons for move are currently needs based:
 Declining health, isolation / loneliness.
 Need to downsize / smaller garden.
 Equity withdrawal.
 Be nearer family / facilities.

20. What do our customers say?
 92% satisfaction rate.
 Personal: increase in sense of safety and
companionship.
 64% report improvement to health and wellbeing.
 Fewer hospital admissions and GP appointments.
 More likely to use local amenities and a facilities.
 Wish they did it earlier.
 BUT, if satisfaction is high, why is supply so low?

21. Market challenges
 Wider problems of the housing market.
 Affordability: our properties are priced circa 20%
below general house prices, but still out of reach of
many.
 Rising development costs and land competition,
meaning many areas where we cannot build.
 Importance of design: need to be more
‘aspirational’ / HAPPI and appeal to an increasingly
diverse group, but balance this with affordability.
 Building retirement housing is a complex form of
accommodation to deliver, so few providers try.
 Greater clarity needed from industry on
service charges / fees.

22. Market challenges
 But, the biggest challenge for providers is when
the planning system doesn’t recognise the need for
older people’s housing.
 Lack of integration and policy connection with
housing and social care departments.
 Many applications refused, or never come forward.
 Impact of the Community Infrastructure Levy and
other planning obligations.
 Lack of encouragement in Local Plans.
 National policies are encouraging delivery, but
what is their impact locally?
 Different impacts across regions.

23. Market opportunities
 Over 65s will grow from 10m to 17m by 2033.
 Growth fastest among frailest (over 85s)
 60% of all household growth will be over 65s.
 Retirement housing in Australia and New Zealand
is 17% of all stock (just 2% in England).
 Increased choice, supply and providers should
help affordability.
 University of Reading: strong potential to grow
from delivering circa 4,000 units a year to 16,000.
 Shelter / YouGov poll in 2012: a third of all older
people would consider retirement housing if it
was available – demand is there.

24. What can be done?
 Existing providers to continue to improve offer.
 New entrants to be encouraged into the market.
 Local Government support – a five step plan:
 High-level buy-in.
 Comprehensive needs assessments, evidence
base and understanding.
 Housing / planning strategies, Market Position
Statements .
 Health & Well-Being Boards and CCGs.
 Partnership with providers (for instance, to
deliver DH’s £300m fund).
 Planning toolkit published today.