"Yes, bungalows still have a role to play - but only as part of a broader mix. The benefits of later living schemes are well documented."
- Neil Moy - Paragon Bank
The UK’s ageing population presents one of the most pressing housing challenges of our time. According to the Office for National Statistics, the number of people aged 65 and over is projected to grow by nearly 5 million over the next two decades. Yet the current debate around housing for older people remains frustratingly narrow, focused on the nostalgic appeal of bungalows.
As Managing Director of Development Finance at Paragon Bank, my team has worked closely with SME developers across the UK to fund the delivery of over 13,000 homes since 2018. Our customers are at the coalface of the housing crisis, and many agree that they would love to build bungalows, but the economics simply don’t work.
These days, due to a dysfunctional planning system with delays at almost every stage and a widespread culture of NIMBYism, too many developers are left bidding for limited plots of land that is viable for building – and this means bungalows, being land-hungry as they are, are no longer commercially viable.
At an event we hosted last month in fact, several SME developers shared that on a typical plot, they’re required to build three- or four-bedroom houses in order to make any profit. And with planning constraints, high regulatory costs and intense competition for land, they’re especially unfeasible for smaller builders who lack the scale and margins of national firms.
These issues don’t just lie with the market, but with policy too. The planning system remains inconsistent and fraught with hurdles, including local opposition, which stalls progress. While recent government efforts to support SME housebuilders are welcome, they could go further and address the specific challenges of later-life housing. If we’re serious about meeting the needs of our ageing population, we must move beyond the bungalow myth and take a more holistic approach.
Older generations are not homogeneous, and we need to recognise their diversity of needs by supporting a range of housing options. Retirement villages with integrated amenities, social spaces and support services offer a lively and community-focused alternative to traditional housing. Extra care housing provides independence with access to care when needed, whereas specialist rental schemes offer flexibility and affordability, whilst care homes, when well-designed and well-managed, prioritise dignity and wellbeing.
Yes, bungalows still have a role to play - but only as part of a broader mix. The benefits of later living schemes are well documented. Research has found residents in purpose-built later living communities experience improved wellbeing, reduced loneliness and fewer hospital admissions due to falls – despite this, we’re only building around 7,000 later living homes a year, when estimates suggest we really need between 30,000 and 50,000 annually to meet demand.
There’s also a significant lack of awareness of the options available. Many older people – and their loved ones - don’t know what housing options are available to them, and too often, later living is wrongly conflated with care homes. This misconception has a damaging impact on both
Demand and investment in a sector which is critically needed – these schemes ease pressure on the NHS, free up under-occupied family homes, and ultimately improve quality of life for millions.
If we’re to deliver the change needed, central and local government must commit to fast-tracking planning for later living schemes and allocating land specifically for older people’s housing, with incentives offered to developers and lenders who are delivering solutions in this space. Even better, we could also give later living a rebrand through a national awareness campaign to reposition these developers as genuine communities, highlighting their well-documented health, social and lifestyle benefits.
The All-Party Parliamentary Group on Housing and Care for Older People has long called for these measures, including integrating later living into local plans and regenerating outdated sheltered housing.
There has been some progress. In May 2023, the Government established the Older People's Housing Taskforce to explore options for the greater provision of suitable housing for older people. Unfortunately, implementation has been slow, whilst the impending housing crisis for older people draws ever closer.
At Paragon, we’re committed to supporting developers who want to build high-quality, community-focused homes for our older generations, and through our Development Finance division, we’ve supported several later living schemes, with an appetite to do more in this space.
Ultimately, whilst the bungalow may be a comforting symbol of nostalgia, it’s not a solution that reflects the complex and diverse housing needs of our ageing population. If we’re to meet the growing demand, we need a joined-up effort across government, industry and finance to scale solutions.
