By: Gary Day

The radical proposals set out by the Government in the Planning White Paper demonstrate a fresh approach to long overdue reforms that we hope will boost economic growth and support older people at this crucial time for the country.

These proposals represent a welcome step forward in potentially securing a swifter, more efficient planning process that will help improve the supply of retirement communities – a sector that has long been overlooked or ignored by planning policy. However, we should not be complacent. This is just the first step and our sector must continue to engage with the White Paper to ensure it delivers for the retirement housing market and those customers that will benefit from the delivery of more and better specialist housing for older people.

We know that retirement communities have a significant positive impact on the well-being of older people, creating happier, healthier and longer lives, while also helping to manage the impact of an ageing population. The COVID-19 backdrop has further illustrated the unique benefits of independent retirement living and proven itself to be a safe haven for older people, with very low infection rates across our schemes. We believe that the increased focus on the wellbeing of older people as a result of COVID-19 also presents us with an opportunity to engage more constructively with the Government to develop a long-term plan, including planning reform to provide more options for keeping older people safe at home.

However, local and national planning policy has been largely silent on the need to build this form of housing and, as a result, only around 162,000 retirement properties[1] for homeowners have ever been built in this country. It’s noteworthy too, that while it does contain lots of positive proposals, the White Paper doesn’t include a single reference to the ageing population or older people.

But that said, there are three proposals outlined in the White Paper that I believe will have a notable impact on the retirement sector.

First, and most helpfully, there is the proposal for an 18-month exemption from affordable housing payments for developments up to either 40 or 50 units to support the COVID-19 economic recovery. While not retirement-specific, this should benefit retirement housing given that most developments are less than 50 units – although extra care housing schemes tend to be larger, so we should be calling for the threshold to be set at 80 units in order for this specific and important type of retirement housing to be exempt. An exemption from affordable housing is something our sector has long called for given the significant impact affordable housing contributions have on scheme viability for retirement housebuilders and thus, how seriously they impact on supply.

We will be urging the Government to make this a permanent change, which would encourage a greater volume of building of retirement communities and satisfy the demands of an ageing population. Knight Frank estimates there is demand for up to 30,000 units per year, yet just around 8,000 came to the market in 2019. Meeting that demand will only be achieved with significant planning reform that recognises the different viability model of all forms of retirement living.

Second, there is a move to a zonal planning system that is common in Europe, rather than the existing discretionary-based process. This could potentially result in a faster planning process with automatic planning consent being granted for proposals in the right areas. We recognise that the changes will take some time to come in and that these come with tighter design standards.

Our sector must engage with the Government on this issue to ensure that it will be relevant to retirement living. If we can ensure the adoption of appropriate design management criteria and a “pattern book” of designs for the different types of retirement housing, we’ll see a step change in the rate of schemes coming forward and being delivered – ultimately to the benefit of our ageing population.

Third, existing S106 and CIL provisions will be abolished in favour of a single “Infrastructure Levy” which will be applicable to all forms of development so as to capture more from land value through the granting of planning consents. We have long called for a simpler approach to CIL and other planning contributions and would be hugely supportive of any change that establishes a more level playing field for companies like us. McCarthy & Stone, along with other retirement operators, would certainly benefit from a potentially more straightforward approach with greater certainty at the point of land acquisition and a faster planning process.

But the devil will be in the detail of this proposal in the White Paper. The new Infrastructure Levy will have to, in our view, take account of the different viability issues arising from the development of green field sites and those associated with centrally-located brown field sites – the latter being the types of sites that we commonly develop where we frequently face additional costs arising from, for example, decontamination, safeguarding of archaeology and the protection of heritage assets.

Moreover, there are different costs associated with the development of different housing typologies, including, in particular, retirement housing where some 30% or more of the development is non-sellable floor space. So, while we support the principle of the proposed Infrastructure Levy, the reform raises serious questions, which are yet to be answered.

The Government has asserted that it is in favour of building more housing suitable for older people, yet there is much more that it can and should do to ensure that it gives due recognition to the critical need for more and better retirement housing. As part of this, the proposed planning reforms set out in the White Paper should be seen as a first step to ensuring that retirement communities are not left behind once again. If the sector responds proactively to the consultation, this should help guarantee that we and other developers can better aim to meet the growing demand in this important part of the housing market.

[1] Knight Frank: Retirement Housing (2018)