With many housebuilders adopting a cautious approach to retirement living in Scotland, Savills has identified ‘an untapped opportunity’ for investors willing to provide new housing for the retirement sector north of the border.
Research from Savills looks at how developing a collaborative and creative strategy, involving landowners, planners and developers, can help cater for this important and growing target group of homeowners, including a two-tier approach that is not solely focused on the top end of the downsizer market.
With a growing older population who have a pressing housing need and equity to invest, the company believe that not only is there a commercial opportunity, but a corporate responsibility for the planning and development sector to address this important market in Scotland.
Savills research states the number of people aged over 65 is set to increase from 550,000 to 1.4m by 2037, an increase of at least 100,000 every five years. This unprecedented level of growth will be spread geographically and will have important implications for housing across Scotland.
The findings reveal that the average transaction value in Scotland - in the year to March 2016 - was £166,624, compared to £250,000 across the UK as a whole. Therefore, whilst a considerable number of over 65s own their property outright in Scotland, it is unlikely that many people will able to release large amounts of equity.
Consequently, the challenge for those seeking to provide retirement housing in Scotland will be providing desirable properties at attainable prices.
Savills says that a two-tier approach is required which will cater both for downsizers operating at the top end of the market, but also for more modest retirement housing. So, although there are challenges for developers and investors in terms of value, the demographics indicate a huge untapped opportunity for the right product for the right buyer.