The UK’s senior living and care sector is moving rapidly up the real estate and policy agenda, driven by the well-established demographic shift. The population aged 80 and over is on course to double within two decades, while the NHS is already operating beyond capacity and the country faces a chronic shortage of suitable housing for older people. Against that backdrop, the question is no longer whether the UK needs a more coherent pipeline of age‑appropriate housing and care, but how quickly it can be delivered – and what models will shape the next phase of growth.
At this year’s UKREiiF in Leeds, that challenge was addressed in a panel hosted by Michael Hodges, managing director – capital markets, at specialist business property adviser Christie & Co. He chaired a panel of European operators and investors exploring how senior living and care can support the NHS and the wider community.
Investors in Healthcare caught up with Hodges as he reflected on the key themes that emerged from the discussion and their implications for investors, policymakers and operators as the UK confronts one of the most pressing structural issues in its healthcare real estate landscape.
Investors in Healthcare: What was your most striking takeaway from the panel discussion about where the UK stands today in terms of age-appropriate housing and care provision?
Michael Hodges: The standout point was just how compelling the investment case is. If you look at demographics alone, the population aged over 80 is set to double over the next 20 years. That, combined with the pressure on the NHS and the broader housing shortage, creates a very powerful backdrop.
What came through clearly is that delivering age-appropriate housing – whether that’s care homes, retirement living or integrated care models – has a transformational impact. It improves outcomes for residents, reduces strain on the NHS and frees up under-occupied housing.
Yet despite that, the UK is still relatively early in its journey. Care homes have seen strong investment momentum, but the penetration of age-appropriate housing remains low compared to other developed markets. So, there is a significant gap between need and supply.
In terms of monetising the value delivered to the NHS and wider system, there is good evidence that integrated models – such as embedding primary care and health services into communities – can generate meaningful benefits for investors and society. The challenge is more around adoption, particularly in areas like technology-enabled care, where user familiarity still needs to catch up.
IIH: Is the UK’s undersupply primarily a planning issue, or a question of capital and business model design?
MH: It’s a combination, but planning and development constraints remain a major bottleneck. The time it takes to go from site identification to delivery is a key barrier.
That said, it’s not just about planning. Business model design and affordability are equally important – particularly if the sector is to expand beyond the affluent segment and into the mid-market.
Internationally, there is a lot the UK can learn. The Netherlands is often cited, particularly for its innovative approaches to community integration and intergenerational living. There are also interesting models in Australia, the US and New Zealand, including the household model in care, a model that focuses on creating smaller, self-contained living units in community environments that resemble a home rather than a hospital or nursing facility.
More broadly, other countries tend to take a more holistic approach – thinking not just about care provision, but about how entire communities are designed to support ageing populations.
IIH: Which emerging operating models have the strongest investment case in the UK?
MH: Intergenerational living is one of the most interesting themes. There are clear social, economic and health benefits from bringing different age groups together – whether that’s older residents interacting with children, or even students living in subsidised housing within schemes.
From an investment perspective, these models are viable and scalable, particularly in new-build developments where you can design them from the outset. For example, integrating early years childcare into schemes is entirely feasible and aligns with existing demand for workplace nursery provision.
The main constraints are practical rather than conceptual – site availability, planning, development economics and execution. Retrofitting existing stock is more challenging, but in new developments there is real potential.
What’s also important is that the sector has historically been quite siloed. There is a growing opportunity to connect different parts of the care and living ecosystem – senior living, care homes, childcare, healthcare services – into more integrated platforms.
IIH: How do investors think about care homes versus retirement living in terms of risk, yield and demand visibility?
MH: Both are attracting strong interest, but they have different risk-return profiles.
Care homes typically offer a shorter path to income and returns, whereas retirement living requires more patient capital due to longer development and stabilisation periods. However, once mature, both models can deliver long-term, sustainable cash flows.
What is driving investor appetite is the fact that this is a needs-based sector. Demand is underpinned by demographics and is far less exposed to structural disruption than many traditional real estate asset classes.
We are also seeing a broadening of the investor base. Specialist healthcare investors remain active, but institutional capital – pension funds, global investors – is increasingly entering the space. The key requirement is operational expertise. This is not passive real estate; it is operationally intensive, and success depends on strong alignment with experienced operators
IIH: What needs to happen to unlock the next phase of growth – and are you more or less optimistic after chairing the panel discussion?
MH: The overall tone at the conference was positive, and the level of engagement showed how much interest there is in the sector.
To unlock growth, several things need to come together. First, there is a need for greater awareness and education – across policymakers, investors and the wider real estate community – that this is a critical area of need and opportunity.
Second, planning and development processes need to be streamlined. The current system slows delivery at a time when speed is essential.
Third, affordability and business model innovation are key. The sector needs to evolve to serve a broader demographic, which may involve different design standards, tenure models – particularly a shift towards rental – and more cost-efficient delivery.
Ultimately, the fundamentals are very strong. The demographic drivers are undeniable, the societal benefits are clear, and investor interest is growing. If the industry can align around delivery, the outlook is very positive.
