Senior housing in Scotland: a development and investment opportunity?
| DOI | https://doi.org/10.1108/JPIF-10-2020-0119 |
| Published date | 21 December 2020 |
| Date | 21 December 2020 |
| Pages | 525-544 |
| Subject Matter | Property management & built environment,Real estate & property,Property valuation & finance |
| Author | Andrew Fyfe,Norman Hutchison |
Senior housing in Scotland:
a development and
investment opportunity?
Andrew Fyfe
Sovereign Property Partnership, Edinburgh, UK, and
Norman Hutchison
Centre for Real Estate Research, Business School, University of Aberdeen,
Aberdeen, UK
Abstract
Purpose –This article aims to understand the housing needs of older people and to ascertain the level of
demand and supply of age-related housing in Scotland. It also explores interest in different types of retirement
accommodation and tenure options.
Design/methodology/approach –A review of existing literature is undertaken on senior housing
preferences and residential satisfaction. Primary data is collected from an online survey of people over 55 in
Scotland to ascertain demand side requirements with secondary data on current supply obtained from the
Elderly Accommodation Counsel and data on future pipeline collated from market reports.
Findings –The results from the survey confirm earlier research that seniorswhen looking for accommodation
in their retirement years particularly focus on the local area, access to shops, social relations with neighbours
and the design of the home interior. Currentanalysis of the level of supply at a county level reveals that there is
significant undersupply with some particularly striking regional differences. Along with a desire for owner
occupation there is interest, particularly among the 75 plus age group, to lease their accommodation, perhaps a
consequence of volatile property markets, insufficient pension provision or a desire to pass wealth to their
family prior to death. This shortfall in supply highlights development opportunities and raises the possibility
of introducing a build-to-rent senior housing offering, which may be of interest to institutional investors.
Practical implications –The Scottish Government is currentlyreviewing its strategy for Scotland’solder
people.The results are of practicalbenefit as they expose thegaps in supply of age-relatedstock at county level.
Thismay require the governmentto introduce policymeasures to encouragea mix of housing types suitedfor the
ageingdemographicsof the population. Thisresearch highlightsopportunitiesfor developers andinvestors to fill
that gap and explainswhy advancements in technologyshould be incorporated in thedesign process.
Originality/value –This paper brings together supply side data of senior housing in Scotland and provides
insights into the housing preferences of seniors. It will be of direct value and interest to developers and
institutional investors.
Keywords Senior housing, Residential satisfaction, Build-to-rent, IoT in home living
Paper type Research paper
1. Introduction
Scotland’s population is ageing. By 2028 there are projected to be 38,100 more people of
pensionable age in Scotland with the number projected to increase by 240,000 by mid-2040
(National Records of Scotland, 2019a). Suitable senior housing, amongst other things, is a key
aspect in enhancing quality of life for an ageing world population, a view supported by the
United Nations (2017) “as populations grow older, it is more important than ever that
Governments”design innovative policies and public services specifically targeted to older
persons, including policies addressing housing, employment, health care, infrastructure and
social protection, among others’(p. 2).
Senior housing
in Scotland
525
The authors express their thanks to the Elderly Accommodation Counsel for their assistance throughout
this project and to Caroline Laurenson for her help on technology advancements.
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1463-578X.htm
Received 19 October 2020
Revised 30 November 2020
Accepted 30 November 2020
Journal of Property Investment &
Finance
Vol. 39 No. 6, 2021
pp. 525-544
© Emerald Publishing Limited
1463-578X
DOI 10.1108/JPIF-10-2020-0119
The current strategy for senior housing in Scotland is due to expire in 2021 (Scottish
Government, 2011) and so it is an appropriate time to investigate this subject and review the
changes in demand and supply, along with societal changes, that have occurred since this
strategy was adopted. Anecdotal evidence would suggest that the number of houses being
built specifically to meet the demands of older people who are still capable of living
independently, appear to be very low. Older people are defined in this paper as those over the
age of 65, the age the Organisation for Economic Co-operation and Development (OECD) uses
to define older people (OECD, 2019, p. 1).
There are indications that there are a substantial number of people in the UK of retirement
age who would like to move to smaller homes, but cannot find a suitable property, due to a
lack of options. Many of these people live in mainstream homes with only a small percentage,
circa 7%, living in more specialised housing (Torrington, 2014). Given present levels of
demand and with the population over 65 continuing to grow, it seems to be a surprising and a
potential market failure, that more developers have not seen the potential opportunity in this
subsector of the housing market. This potential maybe not only for the construction of senior
housing for sale but also to let, as there is growing evidence that seniors who are owner
occupiers would be willing to consider renting an age suitable dwelling, particularly in their
later years.
In this paper we will use the term “senior housing”to refer to housing built specifically for
the needs of those aged over 65 [1]. In the literature this is sometimes referred to as “retirement
housing”and includes the range of different types of age restricted housing such as flats,
houses and retirement villages and whether they have onsite care. However, care homes will
not form part of this research as they are viewed as operations more focused on health care,
rather than housing.
The aim of this research is to answer three central questions: first, what are the needs of
older people in terms of achieving residential satisfaction, secondly what is the current
provision of senior housing in Scotland across both the public and private sector and thirdly
is there enough demand for senior housing in Scotland to warrant more supply.
The first objective will be to establish the needs of senior citizens in order for them to
achieve residential satisfaction. For example, is it the house itself that is important, or the
location or a combination of the two? The second objective will be to find out how much
demand there is in Scotland for senior specific housing and to establish what types of housing
are of the most interest to seniors living in Scotland. The third objective will be to research
house-building data to find out how much senior housing exists, the amount that is currently
being built and in the pipeline across the public and private sector in Scotland. The final
objective will be to identify areas for further research and key points which need to be
addressed in order to make future improvements.
The remainder of this paper is structured as follows. Section 2 contains a critical review of
the literature relating to residential satisfaction, senior household needs, levels of disability,
illness and life expectancy in Scotland and technological solutions to aid independent living.
Section 3 outlines the research design followed by results and analysis in Section 4.Section 5
examines the supply of senior housing in Scotland while Section 6 presents conclusions from
the research.
2. Literature review
Where a person lives is one of the most important factors in determining their overall
happiness and well-being and a significant topic in environmental psychology. In relation to
our first question it is important to establish what older people need in order to be happy in
their home environments as this will help to shape the provision of suitable senior housing in
the future (Lawrence, 2002).
JPIF
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