Developing Mixed Tenure Homes for Older People

1. Developing Mixed Tenure Homes for Older People

2. About Us • Housing and Development Consultancy • 15 year history • UK wide - offices in Warrington and London • Key service areas: • Development Agency services • - Extra Care and Older Person’s housing • - Development Procedure guidance • - Training and Staff development • - Sales support • - Audit control Project Development Workshop Ltd

3. Overview • Context • Risks • Planning • Design • Sales • Market Rent • Affordable Rent • Conclusions Project Development Workshop Ltd

4. Context Older people are the biggest challenge in today’s housing market. They will make up 60% of all new growth in households to 2033, and a substantialmajority of new households in many regions will be over 65. (DCLG 2013). • More homes delivered in a way that supports more effective housing markets. • Shift high cost health and care interventions towards sustainable community solutions. • Increase choice so that people are better able to plan for later life. • 76% of older people own their own home. • £600B+ unencumbered asset wealth. Project Development Workshop Ltd

5. Types of Mixed Tenure • Increasingly Providers directed towards offering greater choice. • This can include: • Outright sale • Older Person Shared Ownership • Shared ownership • Market Rent • Affordable Rent • Social Rent Project Development Workshop Ltd

6. Risks • Values fall • Sales fail • Lack of overall demand • Cross subsidy needs to be viable • Affordability – perceived as expensive • Service charges critical • Community cohesion problems • Re-sales drive down values • More expensive to manage / maintain than thought • Revenue funding streams threatened • Resident expectations not met Project Development Workshop Ltd

7. Planning: Understanding customers • Research/analysis to identify target markets. • Different age groups may have different motivations: • 60’s-70’s : Lifestyle, equity release, downsizing • 80’s – security, social contact, post bereavement, health • 90’s – care, security, social contact, dementia • Target segments by tenure from onset/ inform nominations. • Understanding different motivations inform different marketing approaches e.g. high care/older marketing may be to families. Project Development Workshop Ltd

8. Planning – The Building • Work with clear end in mind – what does success look like? • Develop great partnerships – care, LA, internal from inception • Thorough market analysis – what works /doesn’t • Residents needs will change - design flexibility • Future proof – technology ready • Smart Building Management – efficient energy management • Renewable energy? Project Development Workshop Ltd

9. Design Challenges • Site constraints • Expensive to build • Expensive to run • Higher service charges • Future proofing • Different segments, different needs and requirements Project Development Workshop Ltd

10. Good Design • Think HAPPI..... • Generous space standards • Maximise daylight • Natural light, balconies • Adaptability & Care readiness • Positive use of circulation – encourage social interaction, surveillance • Communal facilities • Energy efficient • Storage Project Development Workshop Ltd

11. Affordability • Research what can target markets afford – sale or rent • % local house prices higher than proposed sale OMVs • HCA OPSO affordability – use discretion on equity • Design down service charges • Energy efficiency/renewables – flats and communal • Charitable considerations if v high values + other choices available Project Development Workshop Ltd

12. Sales – General Considerations • Most general rules still apply to older person housing: • Research your target markets - use to inform marketing plan, mix etc. • Early marketing and detailed programme. • Reserve off plan. • Legal preparation early on. • Specification and design well thought through. • Service charge calculations at viability stage. • VFM, risk and governance. • Scenario testing and exit routes. • Track cumulative sales exposure across programme. Project Development Workshop Ltd

13. Sales – Older Person perspective • Competition - good and bad • Understand local retirement market (not just housing market) • Contract sectional completion, accessible sales cabin/ show flat • Clear signposting to appropriate IFA’s + solicitors • The right sales staff – hand-holding • Part-exchange partner and/or well briefed estate agents to help owner occupiers sell their property • Flexible – OPSO, SO, Outright and rent before buying options • Manage re-sales too to retain values • Move-In teams – make as easy as possible • Find and address fears, concerns honestly and directly • Lease consistent with tenancy agreements • Agree early on – who will manage block Project Development Workshop Ltd

14. Market Rent • Increasingly attractive? (research) • Obviously no short-term capital receipt (but higher revenue) • Furnished or unfurnished? • Service charges included • Rent inflation assumption? • Deferred sale option • Deposit administration • Demonstrate social housing is protected Project Development Workshop Ltd

15. Social/ Affordable Rent • Warrant equal research • Don’t pretend they’re not there • Challenge prejudice • Sensitive lettings sensible - supports cohesive community • Agree nominations processes in planning stage - this should inform sales target markets too • Danger – if social rent lets are to all high care/frail market • Manage lettings like sales with move-in teams • Tenancies generally consistent with lease conditions • Manage expectations and differences of apartment living • Internally -who will manage? Decide early Project Development Workshop Ltd

16. Conclusions • Research, RESEARCH, RESEARCH - don’t assume / stereotype • Clear view of what success looks like • Apply research to design, marketing strategy, nominations…. • Market segments very diverse, vary place to place • Look to extract and address concerns/ fears, reassure honestly • Realistic marketing plan/budget, sales cabin and move-in team • Joined up approach to sales and lettings • Agreement early regarding internal management arrangements • Seek out and address fears – challenge prejudice • Consistency in tenancy agreements/leases Project Development Workshop Ltd

17. Contact Details Ben Clay Tel: 07753 220988 Email: Ben.Clay@pdw-uk.com Steve Wood Tel: 07962 563823 Email: steve.wood@pdw-uk.com Project Development Workshop Ltd