Is the UK Running Out of Retirement Homes?

The UK’s over-65 population is growing faster than the homes being built for it. According to ONS projections, the proportion of the population aged 65 and over is expected to reach around one in four by the early 2040s, up from roughly one in five today. That’s a huge shift, and the housing pipeline doesn’t reflect it.

The government’s 1.5 million homes target dominates the headlines, but almost none of that conversation focuses on what kind of homes are being built, or who they’re actually for. Below, we’ll walk you through where the real gaps are and what it’ll take to close them.

The Numbers Don’t Add Up

The government has committed to building 370,000 homes a year across England to hit its 1.5 million target by the end of this parliament. According to Full Fact, just 309,600 net additional homes were added between July 2024 and January 2026, putting delivery well behind schedule. The focus so far has been on first-time buyers, social rent and affordable housing. That makes sense politically, but it leaves a blind spot.

Around 1% of UK adults aged 65 and over live in purpose-built retirement communities, compared to around 5 to 6% in countries like the US and Australia. While 2 to 3% of total UK housing stock is classed as designed for older people, much of it is dated sheltered housing that no longer meets modern expectations.

The Housing LIN has estimated the UK will need an extra 725,000 senior living homes by 2030 to meet demand. Right now, barely a fraction of that is in the pipeline.

Where Housebuilders Are Falling Short

Most volume housebuilders are geared towards three- and four-bedroom family homes. That’s where the margins are, and that’s what planning departments tend to approve without friction. But it creates a bottleneck further down the chain.

Older homeowners sitting in larger properties they no longer need can’t downsize because there’s nothing suitable to move into. That locks up family-sized homes that younger buyers desperately need. It’s a chain reaction, and the trigger is a lack of age-appropriate stock.

Even the government’s revised National Planning Policy Framework, updated in December 2024, gives only a passing nod to housing for older and disabled people. The emphasis remains overwhelmingly on volume, not variety.

What’s Actually Growing in This Part of the Market

A few corners of the housing sector are responding to this gap. Retirement villages and extra-care schemes have seen modest growth, but they tend to carry high price tags and long waiting lists. One segment that’s expanded more quietly is residential park bungalow homes, which offer single-storey, low-maintenance living in community settings. They appeal to downsizers who want independence without the upkeep of a traditional property.

These types of developments sidestep some of the planning hurdles that slow down conventional housebuilding. They also tend to sit on privately managed land, which means they can be delivered faster and at a lower cost per unit than traditional brick-and-mortar retirement schemes.

Why Planning Reform Alone Won’t Fix This

The government’s planning overhaul has been the centrepiece of its housing strategy. Faster approvals, grey belt reclassification, density targets near rail stations. These are all welcome moves. But they’re designed to increase the total number of homes, not to steer what gets built.

There’s no specific target for retirement or later-life housing within the 1.5 million goal. While local authorities are technically expected to consider the housing needs of older people in their local plans, the requirement is vague and poorly enforced. More than a third of local authorities in England still make no specific provision for older people’s housing. Until that changes, developers will keep building what sells quickest, and older people will keep waiting.

A report from Pension Insurance Corporation highlighted this exact problem, noting that senior living is an overlooked part of housing policy despite the demographic pressures making it increasingly urgent. Their analysis pointed out that demand for age-appropriate housing could rise by 40-50% over the next decade.

What Needs to Change

Fixing this gap won’t require a revolution in policy. It’ll require a shift in priorities. A few practical steps would make a real difference:

• Ring-fencing a proportion of new housing targets specifically for later-life and retirement homes
• Giving planning departments clear guidance on assessing local need for age-appropriate housing
• Incentivising developers to include downsizer-friendly stock in larger schemes
• Reducing the red tape around alternative housing models like park homes and retirement communities

None of these measures are radical. They simply ask the system to acknowledge that housing need doesn’t stop at age 65.

The Important Takeaway

The UK isn’t technically running out of retirement homes. It never had enough to begin with. The ageing population is accelerating, the housing pipeline is already behind target, and almost nothing in current policy addresses the specific needs of older people.

If the government is serious about solving the housing crisis, it’ll need to build homes for everyone, not just first-time buyers. Until retirement and later-life housing gets its own seat at the planning table, the gap will only keep growing.