Wealthy Londoners are increasingly choosing high-end retirement housing, a market experiencing rapid growth and attracting significant investment. Britain's over-65 population is projected to grow four times faster than the general population over the next five years, and this demographic holds substantial unmortgaged housing wealth, estimated at £1,200 billion for over-60s in England alone. Retirement homes in prime locations can command sales premiums of 30% to 40% over equivalent non-retirement housing, though service fees can be high.
Several developments cater to this demand, offering luxurious apartments and comprehensive services. For example, LifeCare Residences in London’s Battersea Park offers 108 apartments ranging from £550,000 to £2.9 million, alongside a 30-bed nursing wing and services like a free chauffeur. Eighty percent of these units were sold prior to their April occupancy. Since 2011, £3 billion to £4 billion in private funding has been invested in specialist retirement housing. PegasusLife, a key developer in this sector, secured a £450 million debt facility from AIG and £300 million in founding equity from Oaktree Capital Management, aiming to build 800 high-end units by 2018. Other companies like Rangeford and Beechcroft plan to add another 800 units.
Despite this growth, owner-occupied retirement housing accounts for only 2% of Britain's total housing stock, significantly lower than the 17% in the US and 13% in Australia and New Zealand. Only 1% of new private sector house construction is for the elderly. Developments typically cater to over-55s, include care provisions like live-in nurses, and offer communal facilities such as restaurants, gyms, or pools. These luxury properties allow affluent seniors to downsize from larger homes, freeing up equity. Many older homeowners, possessing excess space in their current homes, have been keen to move but have been limited by a lack of suitable options until now.
