Failing government policy behind the looming crisis in Scotland’s senior housing sector, research says

Andrew Fyfe of Sovereign Property Partnership

URGENT public and private intervention is essential if Scotland is to avoid an elderly housing crisis, according to new research.

The report, just published in the journal Property Management, finds the neoliberalist approach adopted by successive UK and Scottish governments has led to a significant shortfall in housing stock suitable for the country’s aging population.

The research, conducted by Sovereign Property Partnership and BNP Paribas Real Estate, the University of Aberdeen and Lincoln University, New Zealand, focused on the issues surrounding the supply of housing-with-care, independent living accommodation that sits between traditional retirement houses and care homes.

It found there are only 3,782 dwellings of this type across Scotland, 10% of which is private sector housing stock. Retirement villages are also extremely rare, with only three of note currently open.

In Scotland, by mid-2043, it is projected that 22.9% of the population will be of pensionable age, compared to 19.0% in mid-2018 and the report argues that action is needed now across the planning system, property law and social care integration to prevent a crisis.

“The adequate supply of housing is one of the main pillars of the welfare state, but over time successive government’s enthusiasm to intervene in the housing market has shifted, resulting in the majority of new housing being supplied by the private sector and housing policy predominantly relying on the market to respond to demand,” said Andrew Fyfe of Sovereign Property Partnership.

“As there is an overall shortage of housing in Scotland, developers often see better profit margins in mainstream family housing and first-time buyer flats, discouraging senior housing opportunities which require a different set of skills and expertise.

“Demand levels for senior housing are well established and understood, but there is a severe shortfall in the type of housing which offers older people a chance to live independently until such time as they need additional care. Without increased supply of the right type of housing, welfare deficits will occur.”

Housing-with-care is recognised as being a key contributor in helping older people stay independent for longer and avoiding unnecessary hospital admissions. The model is considered a success in other developed nations such as New Zealand, Australia and the US where supply levels are significantly higher.

The Scottish Government has a longstanding policy of ‘aging in place’, supporting people to remain at home independently for as long as possible. Yet since 1999 housing policy has focused on building more affordable homes, with much less emphasis on senior housing. It also recognised that only a small proportion of older people will likely live in new build housing.

“Given the projections about the aging population, combined with the considerable cost and time required to make necessary adaptations to the current housing stock, housing-with-care is the obvious solution to plug the gap,” added Professor Norman Hutchison, Chair at the University of Aberdeen Business School.

“For good reason the Scottish government is focused on housing affordability, but there needs to be a twin track approach with focus on both affordability and the correct mix of housing type.

“The state needs to intervene across planning, property law and social care integration and embed housing-with-care into local and national policy to address this problem and do so with some degree of urgency.”

“A bigger proportion of any new housing must focus on senior housing to make up for years of deficits. The housing-with-care offering should also be available to all sectors of society, regardless of income, and must not be seen exclusively as a private sector solution only available to existing homeowners or the wealthy.”

The study concludes there may be an increasing role for housing associations in this regard, with targeted funding from the state. Owner occupier and rental options should also be available with developments funded by the private and public sectors, as well as possible joint ventures between the two. A partnership approach might for example see local authorities identifying suitable sites for senior housing from their existing land holding, which when combined with the development expertise and capital raising ability of the private sector would expedite completion of schemes.

“Only through the public and private sector working closely in partnership will sufficient housing be built to meet the needs of seniors and allow them to live with appropriate levels of care and dignity in the decades to come,” added Professor Hutchison.

The report authors are Professor Norman Hutchison from the University of Aberdeen; Andrew Fyfe from Sovereign Property Partnership and BNP Paribas Real Estate, Scotland; and Professor Graham Squires from Lincoln University, New Zealand.

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