Fears of £6bn hit to development of extra care housing

MPs and developers of homes for older people have called on the government to urgently bring forward planning reforms to aid the development of extra care housing or risk jeopardising £40bn of development plans.

The Association of Residential Care Operators (Arco) said the government needed to clarify the place of extra care housing – also called housing with care – in the planning system, to ensure that it wasn’t subject to the same planning obligations as mainstream housing.

The organisation, which represents developers and operators of extra care housing, said its members planned to build 125,000 additional homes at a cost of £40bn over the next decade prior to the covid crisis, but that this investment was now at risk.

It said that in the next five years alone it now expected investment to be up to £6bn lower as a result of the economic crisis, unless government supported an industry-devised action plan for the sector.

The group said it needed to government to follow through on promised reforms enabling better consumer protection for new innovative fee structures and also, crucially, long-requested planning reforms. 

Arco said that new research carried out by estate agent CBRE found that 95% of potential investors in extra care housing would be more likely to invest if there was more clarity around its status in the planning system.

Conservative MP Bob Blackman has laid down an Early Day Motion in parliament supporting the drive by Arco, which “calls on the government to promote measures which will ensure the expansion of that sector.”

Extra care housing for older people is distinguished from traditional retirement housing as it is designed to allow residents to access a range of care services during their time in the property, even if not for all of the time. While this leaves providers with many of the additional costs in terms of communal spaces, kitchens and additional facilities as those operating residential care homes, developments do not consistently receive the same planning status – and subsequent exemption from planning obligations.

A range of institutional investors, including Legal & General, Axa and Goldman Sachs have invested in the sector and are looking to expand it to match the level of provision in other countries. L&G chief executive Nigel Wilson threw his weight behind Arco’s call, as did Jane Ashcroft, chief executive of the largest provider of affordable extra care housing, Anchor Hanover.

Nick Sanderson, chair of Arco and chief executive of the Audley Group, said the need to reform the social care sector was “unarguable” and called on the government not to miss the opportunity to create systemic change. He said: “It is living in unsuitable housing, particularly as people age, that places intolerable pressure on the NHS and social care systems. This pressure has been building for decades.”

Conservative MP Bob Blackman said: “We need more retirement communities to help keep people out of care homes for longer and to reduce pressures on the NHS. I hope that many of my colleagues will support this call.”