The practicalities associated with strengthening planning policies to promote older people’s housing
Drawing on my experience as a planning consultant in the later living sector, this article offers insights and ideas on how the recommendations of the Older People’s Housing (OPH) Taskforce to strengthen planning policy can be effectively implemented in practice.
Shortfall in Older People’s Housing
The Government’s OPH Taskforce report (published November 2024) forecasts a sharp ageing in the population of the UK. At present, over 11 million people (18.6% of the total population) are aged 65 years or older. By 2066, there will be a further 8.3 million (26%) projected UK residents aged 65 years.
The Government’s 2022 consultation on the National Planning Policy Framework highlighted this critical need, citing research from the International Longevity Centre that forecasts a 37% shortfall in retirement accommodation by 2040. The Mayhew Review, another significant report, recommends a national target of 50,000 senior housing units per year, adding up to a million units by 2040. Yet recent figures show that current delivery is significantly short of this need, delivering around 7,000 units annually, which is just 3% of total new housing in the UK.
There is an urgent need for suitable OPH. However, existing and planned housing falls short of demand. The lack of national policy action has been a key driver of this.
Recent Updates to National Housing Policy
The recent government updates to the National Planning Policy Framework (NPPF) and Standard Method in December 2024 made positive steps to increase housing targets and liberalise planning policy by promoting development in the green belt, among other measures. While these changes should help deliver more housing in general, there has been a lack of focused policy specifically for OPH.
Due to factors such as higher upfront costs, operational costs and locational constraints, viability challenges often result in OPH developers being outcompeted by mainstream housing developers in land acquisition. This competitive disadvantage underscores the need for dedicated policies and incentives to support the sector.
Recommendations of Older People’s Housing Taskforce
In light of the above, the Older People’s Housing Taskforce has made a number of recommendations to amend national policy. Below are my thoughts and insights on the practicalities of implementing a selection of the them:
‘Revising the use class definitions guidance to clarify which use class(es) would apply to the various forms of OPH’ / ‘Revising the NPPG and developing a new National Development Management Policy (NDMP)’ / ‘Revising guidance to LPAs - on planning obligations’
There are currently two use classes which are applicable to OPH Schemes: C2 (Residential Institutions (Care Homes, Hospitals etc) and C3 (Dwellinghouses (Mainstream Housing)). However, the reality is that the majority of schemes fall somewhere between the two, depending on the level of care provided.
Furthermore, there is currently a lack of national guidance which provides distinctions between different OPH schemes. This is particularly in relation to scheme-specific viability (contributions to CIL, affordable housing etc), design considerations, levels of care and operational requirements. This presents challenges to LPA policy makers and decision makers who often have difficulty applying appropriate planning policies and obligations to OPH schemes.
In my view, if any update was to be made to the use class order, it would be to add a Use Class C3(d) which would cover Retirement Housing through to Extra Care. This would allow for a midpoint between standard dwellinghouses (C3a) and care homes (C2). Such a use class would benefit from General Permitted Development (applicable to C3 only), but also signify to LPA’s that standardised C3a planning obligations and levies are not appropriate to apply to such schemes.
However, given the individual nuances of each OPH scheme, focussing on use classes (and associated guidance) and definitions to direct policies and decision making will never be an exact science. There could be a risk that too much focus on use classes would confine development proposals to particular requirements, and in turn lose the discretionary benefits of the planning system which helps cater flexibly for complex schemes (which OPH developments certainly are per this matter)!
Therefore, in my opinion, rather than prioritising use classes and associated guidance, focus should be put on another recommendation of the taskforce which is revising National Planning Practice Guidance (NPPG). A key benefit of the NPPG compared to the Use Class Order is that as guidance (rather than legislation) the NPPG can be updated swiftly by the government to immediately dictate policy/decision-making, whilst carrying the same weight as the Use Class Order in directing decision making.
Indeed, recent case law finds the NPPG to have no legal distinction to the NPPF in policy terms. The NPPG could therefore be a quicker and more effective tool to help LPAs navigate policy/decision-making and appropriately cater the needs of OPH schemes. To this end, through the provision of greater description and guidance, an expanded NPPG would create a consistent framework for LPAs to address OPH. It could include agreed requirements for provision, land allocation in diverse locations, and recognition of the nuanced forms and functions of OPH. This clarity would ensure more coherent viability assessments to alleviate financial barriers and foster a more favourable environment for developers and communities.
A current example of where the NPPG disadvantages OPH is on the topic of viability, is where it states in the context of the NPPF’s Golden Rules for permitting development on Grey Belt sites, that “site specific viability assessment should not be undertaken or taken into account for the purpose of reducing developer contributions, including affordable housing”. This guidance particularly disadvantages OPH schemes which would otherwise benefit from the liberalisation of the Green Belt, thereby accentuating to competitive disadvantage.
‘Establishing a common standardised methodology for local assessment of minimum need for the various forms of OPH.’
At present, calculating local need for OPH is a time consuming and technical task which becomes difficult to interpret and apply in practice for planning officers. The reason being is that there is no streamlined national methodology to assess need. As a result, need assessments at decision-level can consist of many factors including unstandardised LPA/county/market area/geographical inputs.
A common methodology would ensure consistency in assessing demand for OPH across LPAs. This would support evidence-based decisions, improve strategic planning, and help meet national targets more effectively. The difficultly in implementing such a methodology would involve capturing the many segmented typologies of OPH to ensure all needs are duly accounted for. Consequently, a multi-categorised needs assessment could become convoluted and impractical to apply to the policy-making process. To remedy this, as a starting point, dividing assessments into just three categories of Care Homes, Extra Care, Retirement may be the most representative method of capturing each typology.
‘Requiring LPAs to co-produce an OPH Strategy.’
Co-production of housing strategies between LPAs and stakeholders would foster more tailored and collaborative solutions. Such strategies would particularly help connect housing officers, health and social care teams, registered providers, planning departments and estates teams to promote a more conjoined approach to facilitating the functional delivery of OPH.
The key drawback is that LPAs may face resourcing challenges in implementing this recommendation and require additional support or funding from the government.
‘Requiring LPAs to allocate sufficient land.’
At present, many LPAs do not allocate land specifically for OPH. It is often assumed that retirement and extra care housing etc will come forward via C3 allocations. However, as already mentioned, the competitive disadvantage for OPH in land acquisition prevents enough suitable sites securing allocations in local plan-making processes to meet need. As a result, OPH schemes often come forward on a speculative basis at windfall sites which is at odds with NPPF’s paragraph 15 that states the planning system should be genuinely plan-led.
Furthermore, windfall sites can often form sub-optimal locations for particular OPH schemes. For example, while sheltered housing is more suitable to town centre locations, generational developments such as integrated retirement communities (IRCs) are often better suited to larger edge of town locations, which in order to secure planning permission, would usually need to benefit from an allocation.
In practice, I think allocations should be mandated and come forward in line with OPH need assessments (as discussed above) which form a representative proportion LPAs’ overall housing requirements per plan period. To provide a mechanism for this, the NPPF could be updated to state something to the effect of ‘OPH must carry the same weight and importance as C3a mainstream housing when assessing need’.
At present, the industry mainly delivers more premium products which is likely a reflection of the reliance of windfall sites and a generally tight market for acquiring suitable OPH sites. A major benefit of allocating land specifically for OPH is that greater certainty would be generated for land acquisition within sector, particularly owing to the increased probability of securing planning permission.
As well as derisking the sector to promote more investment and delivery of OPH schemes, allocated sites tend to be located on the edge of towns and benefit from less planning constraints. This can result in developments being delivered which are capable of reaching higher densities and quantum of development. In turn, schemes can be of a higher volume and therefore be optimised to deliver more affordable products for low/medium affluence people. More specialised SME developers may also enter the market who may have previously been discouraged by the level of risk.
Conclusions
While OPH is not currently at the forefront of the government’s national planning policy reforms, the recommendations put forward by the Older People’s Taskforce appear likely to be effective, implementable and relatively resource-efficient for LPAs.
I think priority should be given to the recommendations which propose quick, simple and effective amendments to policy/guidance, particularly those that de-risk land acquisition and address viability issues. Recommendations such as co-produced strategies, whilst likely beneficial in terms of promoting functional developments, do tend to be more resource intensive and complicated to implement and are without the benefit of short term OPH delivery.
An indirect benefit of increasing the availability of OPH is that it encourages downsizing among older individuals, thereby freeing up existing family homes in a more efficient manner (both in terms of materials and land-take) than constructing additional new stock. Churchill Living’s research suggests that building 40 new retirement homes for older people can free up 62 market homes for other age groups, owing to the implications of downsizing. OPH developments could therefore significantly enhance the delivery of mainstream housing supply, thereby supporting the government’s broader housing objectives (even if the net gain derived from the reprovision of existing housing stock is not explicitly noted in delivery metrics).
Overall, there is a clear appetite amongst developers to deliver OPH. With government support through adoption in national policy and guidance, the recommendations of the OPH Taskforce could unlock the sector’s full potential, enabling it to meet the national target of delivering 50,000 age-friendly homes per year.