‘Too Little, Too Late? Housing for an ageing population

Report finds that Retirement Communities are crucial to tackling the UK’s skewed housing market

‘Too Little, Too Late? Housing for an ageing population

A report by Professor Les Mayhew, Cass Business School

Published by The Centre for the Study of Financial Innovation  


Downsizing is crucial to tackling the UK’s skewed housing market

Report shows that nearly 60 per cent of surplus bedrooms lie in households inhabited by over-65s.

The key to unlocking the UK’s housing crisis lies in tackling the under-occupation of family homes where there are more than 15 million ‘surplus’ bedrooms according to a new report from the Centre for the Study of Financial Innovation (CSFI).

‘Too Little, Too Late? Housing for an ageing population’, authored by Professor Les Mayhew, Professor of Statistics at Cass Business School, shows that under-occupation is concentrated among the elderly population where people tend to live in couples or alone.

The report shows that elderly people should be encouraged to downsize, but the lack of age-friendly housing in the UK limits the options for millions who are open to moving but decide to stay.

Professor Mayhew’s analysis shows that if the situation does not improve, the overall bedroom surplus – where there is more than one bedroom per person – is projected to exceed 20 million in 2040, with nearly 13 million people above the age of 65 living in largely unsuitable households.

The shrinking size of households is linked to the ageing of the UK population, with growth in older households set to account for 36 per cent of the projected 3.7 million increase in the number of UK households by 2040.

Professor Mayhew’s report makes the following recommendations

  • A new government strategy on housing calling for a joined-up approach between departments dealing with housing and health for older people should be established as a key part of the housing mix.


  • In line with the national strategy, local authorities should be required to have a plan for retirement housing, including identifying appropriate sites.


  • The NHS should acknowledge benefits of retirement communities to the elderly – such health, wellbeing and more manageable social care costs – which are largely ignored in its long-term strategy and in planning services for older people.


  • The Government should promote benefits of downsizing and incentivise people to do so before social care is needed, instead of sending mixed messaging about selling homes to pay for social care.


  • Stamp duty tends to jam up the housing market and can add significant costs to downsizing. ‘Last-time’ buyers should be put on an equal footing with first time buyers with property purchases of up to £300,000 nil-banded.


  • House-building priorities must change to cater for affordable housing. While there is plenty of interest in downsizing, surveys show that the number actually doing so is low.


  • Models that defer costs until housing equity is released should be encouraged and monitored for transparency of costs to residents and returns to investors. The deferred fees model achieves this by rolling up some costs until the property is sold.


  • Independent guidance about the financial aspects of downsizing should be available to cover all aspects of the purchase process. The Money and Pensions Service is a possible vehicle for this.


  • Retirement communities should aim to be carbon neutral and use renewable energy as part of meeting the UK’s target of net zero carbon emissions by 2050.


The report reveals several barriers to downsizing, including a dearth of suitable alternatives. Only 2.5 per cent of the UK’s 29 million dwellings are defined as retirement housing, and the stock is heavily skewed towards houses with three or more bedrooms.


Professor Mayhew said:

“If more family homes were freed up by downsizing, the benefits would cascade down the housing ladder because it would enable families to ‘upsize’, allowing more first-time buyers on to the bottom rung.

“More efficient use of the existing stock would reduce pressure to ‘just build more’ as a solution to the UK’s housing shortage.

“The demand is out there as baby boomers seek to redeploy housing equity into smaller, more convenient homes with independent living and easy access to services. This would also reduce pressure on local authority spending through transfer to care homes and allow more efficient delivery of social care to individuals.”


Jane Fuller, Co-director of the CSFI, said:

“Covid 19 has shone a light on problems with care home accommodation. Equally, however, the dispersion of elderly singles or couples throughout mainstream housing imposes extra strain on social service provision.

“What this report proposes – encouragement for such people to move into age-appropriate accommodation – is a happy medium: one in which independent living can be encouraged, but in which provision of social care can be optimised.”


Michael Voges, Executive Director of Associated Retirement Community Operators (ARCO), said:

“The UK’s lack of supply of housing-with-care means that many older people spend more time in hospitals than they need to and have few choices if they wish to move to more appropriate housing.

“This lack of alternatives comes at great cost to the NHS and social care sector, and exacerbates the social care crisis. A transformation in housing provision would also allow hundreds of thousands more older people to live healthier, happier and more independent lives.”


Nigel Wilson, CEO of Legal & General said: 

Our housing stock needs to work for everybody. People of all ages need more supply of housing and better choices, whether they are trying to accommodate a growing family, looking to rightsize to a healthy and safe later living environment, or indeed to retrofit their existing home. 

“We know there is strong demand for the right sort of housing for later life living, with great design, supportive communities and good access to friends, family and facilities. Housing policy now needs to catch up with the demands and opportunities of our ageing demographic: getting this right has benefits for everyone.”


Cass Business School and ARCO provided financial support for the report, which was researched, written and edited independently by Professor Mayhew and the CSFI.

Read the full Too Little, Too Late? Housing for an ageing population report.


Media enquiries:

Les Mayhew 07725607433;

Jane Fuller, CSFI, 07980305278

Gareth Lyon, ARCO, 07535088498

Hamish Armstrong, Cass Business School, 07976402466


Notes to Editors

The Centre for the Study of Financial Innovation (CSFI) is an independent, not-for-profit think-tank that provides a forum for debate and research about the future of finance services. It brings together firms, regulators and independent observers to share ideas about the challenges and opportunities facing one of the most important parts of the economy. The Covid-19 restrictions have prompted it to move its discussions to video, complementing the established ‘round-table’ format.

 Cass Business School, part of City, University of London, has been at the leading edge of business education for over 50 years. Located in a global financial centre, it has strong links to both the City of London and the thriving entrepreneurial hub of Tech City. According to the Research Excellence Framework, 84 per cent of Cass research has been assessed as world leading or internationally excellent. Nearly 4,000 students take part in undergraduate, Master’s and Executive Education programmes each year and, on graduating, join a 48,000+ alumni community across more than 160 countries.

ARCO: the Associated Retirement Community Operators is the trade association for operators of housing-with-care developments for older people. ARCO was founded in 2012 and comprises over 30 private and not-for-profit operators of Retirement Communities, representing approximately 50% of this sector which includes retirement villages. ARCO sets high standards and members must adhere to the externally assessed ARCO Consumer Code. The sector sits between traditional retirement houses (which have less extensive staffing and leisure facilities) and care homes.