Understanding our market:

planning ahead

Care and Support White Paper

Unique in that…

First real legislative acknowledgment of the role

played by the market in delivering social care.

The importance of housing (mentioned no less

than 53 times)

Care and Support White Paper

“The government supports the diverse range of

care providers that currently offer care and

support, including user and carer led

organisations, small and micro enterprises and

social enterprises.

To strengthen this diversity, the Government

will introduce a duty upon local authorities to

promote diversity and quality in the provision

of services.

To help local authorities carry out this duty,

we are offering support to every local authority

to create a market position statement or to

develop their existing one.”

Care and Support White Paper

Government announced a consultation this

Autumn to cover three areas:

Strengthening and clarifying the

responsibilities of local authorities in relation

to the market.

The collection of better market and provider

intelligence.

To what extent further, targeted, action to

address provider distress and failure is

necessary.

Care and Support White Paper

“Housing plays a critical role in supporting people

to live independently, and helping carers to

support others more effectively.

However, the NHS Future Forum reported that the

NHS spends £600 million each year treating

people due to severe hazards in poor housing, the

vast majority of which are associated with falls.

Unsuitable or badly maintained housing is putting

the health and wellbeing of thousands of people

at risk”.

Impact of the current economic

situation on the market?

Cheaper to borrow money now but harder to

obtain due to banks caution.

Low interest rates mean people eat into their

capital quicker.

Harder for older people to sell their property

which may make it harder for people to move.

If in the future there are labour shortage and / or

wage inflation it will hit social care first and

foremost, given it is a minimum wage based

industry.

An upturn may tempt many small residential care

providers to sell, leading to less supply/ more

market consolidation.

Current drivers behind the market?

High level of home ownership amongst older

people. Around 75-80% of older people are home

owners, half of all housing equity is held by the

65and over.

An old age population that is more used to

moving house based on life circumstances.

New DH funding imitative.

Sheltered housing estate the single biggest asset

held in trust for older people in this this country.

Current drivers behind the market?

High start up costs.

General level of state support in England & Wales

diminished.

Little knowledge of what works or what the public

desires in a very young market.

Poor image for sheltered housing.

Unreceptive planning environment.

What do we know about what

consumers want

Location

Design and desirability

Space

Low maintenance

Safety and security

No hidden prices and affordability

IPC’s role in development

IPC leading on the national ‘Developing Care

Market’s programme for DH and ADASS.

Publishing three papers today (copies available

on the IPC stand).

Delivered the SHOP guide as a step towards

wider thinking about Housing choices for older

people and how they might be delivered.

Engaged with providers and strategic

commissioners in exploring how the supported

housing market might best be encouraged and

stimulated.

What is market facilitation?

Based on a good understanding of need and

demand, market facilitation is the process by

which strategic commissioners ensure there is

diverse, appropriate and affordable provision

available to meet needs and deliver effective

outcomes both now and in the future.

The Market Facilitation

Framework

Market intelligence

Demand

What kinds of numbers where?

How is demand currently being met?

What does the future demand for housing

suitable for older people look like?

What kinds of housing do older people want,

under what kinds of tenure, at what sort of price?

Market intelligence

Supply

What kinds of housing where ? What do we do

with what we have got?

What kinds of housing where in relation to which

populations?

What understanding of consumer behaviour? How

much market testing has gone on?

What are the blockages to be overcome and how?

Housing in relation to planning, health and care.

Market structuring

Stimulate the consumer market with a taste of

what might be possible.

Get elected members in on the vision for the

future.

Get the offer to developers right.

Getting health on board.

Planning!

Market intervention

Get support from across the sector for a vision of

older peoples accommodation.

Provide a stimulus package to encourage the right

developments in the right location.

Offer flexible tenure arrangements to suit the local

market.

Ensure that housing takes demand out of the

system

McCarthy & Stone: our place in the

market

Currently 560,000 specialist independent living

dwellings for the elderly (2% of housing stock).

Of this, 106,000 units are for owner occupation.

There are 35,000 Extra Care units (90% rented).

Although we have a 70% market share, our market

is small – we sold just 1,300 units in 2011.

Two main model types. Our Assisted Living Extra

Care model has evolved since launching in 2000.

Ownership-based model (125-year lease).

Increased focus on management services and on-

site personal care / support.

Reinforce the importance of site location.

Our place in the market

Figures: Elderly Accommodation Counsel

Who are our customers?

Owner-occupiers looking to continue ownership.

Majority are single, widowed women, but this is changing.

Average purchase age is 78, rising to 83 in Extra Care schemes, and rising. Most move from five miles away.

Although older people are less inclined to move, over 130,000 still change homes each year in UK –therefore the market exists.

Key reasons for move are currently needs based:

Declining health, isolation / loneliness.

Need to downsize / smaller garden.

Equity withdrawal.

Be nearer family / facilities.

What do our customers say?

92% satisfaction rate.

Personal: increase in sense of safety and

companionship.

64% report improvement to health and wellbeing.

Fewer hospital admissions and GP appointments.

More likely to use local amenities and a facilities.

Wish they did it earlier.

BUT, if satisfaction is high, why is supply so low?

Market challenges

Wider problems of the housing market.

Affordability: our properties are priced circa 20%

below general house prices, but still out of reach of

many.

Rising development costs and land competition,

meaning many areas where we cannot build.

Importance of design: need to be more

‘aspirational’ / HAPPI and appeal to an increasingly

diverse group, but balance this with affordability.

Building retirement housing is a complex form of

accommodation to deliver, so few providers try.

Greater clarity needed from industry on

service charges / fees.

Market challenges

But, the biggest challenge for providers is when

the planning system doesn’t recognise the need for

older people’s housing.

Lack of integration and policy connection with

housing and social care departments.

Many applications refused, or never come forward.

Impact of the Community Infrastructure Levy and

other planning obligations.

Lack of encouragement in Local Plans.

National policies are encouraging delivery, but

what is their impact locally?

Different impacts across regions.

Market opportunities

Over 65s will grow from 10m to 17m by 2033.

Growth fastest among frailest (over 85s)

60% of all household growth will be over 65s.

Retirement housing in Australia and New Zealand

is 17% of all stock (just 2% in England).

Increased choice, supply and providers should

help affordability.

University of Reading: strong potential to grow

from delivering circa 4,000 units a year to 16,000.

Shelter / YouGov poll in 2012: a third of all older

people would consider retirement housing if it

was available – demand is there.

What can be done?

Existing providers to continue to improve offer.

New entrants to be encouraged into the market.

Local Government support – a five step plan:

High-level buy-in.

Comprehensive needs assessments, evidence

base and understanding.

Housing / planning strategies, Market Position

Statements .

Health & Well-Being Boards and CCGs.

Partnership with providers (for instance, to

deliver DH’s £300m fund).

Planning toolkit published today.