A chronic shortage of high quality retirement housing is reaching crisis point in the UK, according to new research by JLL, which estimates that 725,000 housing-with-care units (24 hour assisted care) will be desperately needed to meet demand over the next 10 years.

Many of these retirees want to live in specialised housing, and they have the cash to afford it with over 65s currently holding £800bn in housing equity. JLL estimates that the real undersupply is in the mid and high end areas of the market while the affordable markets have 10 times the units per person in comparison.  

Antony Oldfield, director of healthcare at JLL says: "There are two main retirement housing options in the UK, Housing with Support and Housing with Care. The former became popular in the 1980s, whilst the latter is now the fastest growing part of retirement housing and better suited to the long-term care needs of retirees. This generation has benefited from unprecedented house price growth. To put it in context, if they bought their house in 1970, it has now risen in value by 4,300%. If we applied the equivalent value of growth to a loaf of bread that cost 9p in 1970, today it would cost almost £4. So, not only do they have the spending power, they also desire high quality housing options making the need for investment stronger."

The report, Retirement Living - Where is the Opportunity?,  highlights that the vast majority over 65s are not frail enough to require a care home but many will need more support than conventional housing - this group will hit 3m by 2025. Meanwhile, 2.6m homes could return to the private housing market if building retirement accommodation for this group becomes a priority, according to RICS.