Written evidence submitted by McCarthy Stone [ASC 003]




McCarthy Stone is the UK’s leading developer and manager of retirement communities. We have sold over 58,000 homes for older people in the UK across more than 1,300 developments. We remain as the managing agent and landlord on all new developments built since 2010, and today we operate 450 retirement communities for 20,000 older people. This includes 100 Extra Care developments, where we provide a CQC-registered care service.

Retirement communities help people typically in their late 70s and 80s when they need more care, support and companionship. They provide independent private apartments, shared spaces (such as lounges and restaurants) as well as on-site support teams. We believe that the UK is facing a housing and social care crisis. With a growing ageing population, there is an increasing demand for housing that meets the needs of older people seeking care and support whilst retaining their dignity and independence in later life. The COVID-19 pandemic has shone a harsh spotlight on the resilience of our social care system, outlining the urgent need to consider how we support the UK’s ageing population.

There are three million older people across the UK who would like to move somewhere more appropriate to help them maintain their independence but don’t currently have any suitable options[1]. Supply of homes suitable for later living has not kept up with demand (with just c.8,000 new retirement properties built each year, and even fewer bungalows – indeed just 1,833 new bungalows were built in 2020, a fall of 22% compared to 2019) and the Government needs to look at new ways to help the sector address this imbalance with urgency. More older people need to be able to have the choice and access to appropriate housing, including retirement communities.

This would deliver three key benefits. It would provide savings in social care spending by keeping people independent for longer – savings which can be redirected elsewhere in the social care and local government budgets. The saving to the health and social care system from one person living in retirement and Extra Care housing are c.£3,500 a year.[2] It would release existing family-sized houses onto the market to help first time buyers. And it would have a positive impact on the high street – new research from WPI Economics notes that retirement communities deliver more economic value for a local area than any other type of residential housing.

Thus, we recommend that the Government seeks to support the private sector in delivering more retirement and Extra Care housing as the benefits of this will be felt across the housing chain and social care and health system. We have outlined a three-point plan to support the social care sector and deliver the savings and high-quality care that are both needed, outlined below:

With the forthcoming publication of the Government’s long-anticipated social care white paper, there is a historic opportunity to consider the role that specialist housing can play in supporting people to stay independent for longer and out of residential care. Working in partnership with the private and public sector, we can finally stimulate a national conversation and action plan on how best to provide dignity and independence for Britons in their later years.

How has Covid-19 changed the landscape for long-term funding reform of the adult social care sector?

The disproportionate impact of COVID-19 on our ageing population has highlighted the need for more and better specialist housing to support older people through challenging times. Our communities have not been left untouched by COVID-19, but they have proved to be safe and resilient places to live, seeing a significantly lower impact from the virus than in society in general.

Retirement communities can therefore play a central role in ensuring older people are better protected against future pandemics. Increasing their supply and funding would also help upscale the provision of care services to those who need it most, supporting the housing needs of our ageing population.


In addition, recent research from WPI Economics found that increasing the provision of retirement living provides much-needed support for high streets. Residents of a typical 45-unit retirement development generate £550,000 of spending per year, £347,000 of which goes to local shops, supporting retail jobs and keeping shops open. Boosting the amount of retirement housing would therefore support the Government’s ambitions to rebuild Britain, whilst also upscaling the provision of care services to those who need it most.


How should additional funds for the adult social care sector be raised?

We believe that the social and economic gains of retirement communities, and its different viability model, should be reflected in the Section 106 payments and CIL system.


The Government should also agree the proposed operating framework giving older people and their families choice of tenures and payment options so that they can choose how best to pay for their retirement property. This can be done through endorsing private sector providers.


How can the adult social care market be stabilised?

The adult social care market can be stabilised through encouraging downsizing. Research from WPI Economics found that three million people in the UK over the age of 65 (or 25%) want to downsize. If all the homeowners over the age of 65 in England who wanted to move were able to do so, they would directly release one million properties back onto the market and free up two million spare bedrooms.

Our estimate is that every Homes for Later Living property sold generates two moves further down the housing chain, and in certain circumstances this may be more. This frees up homes at differing stages of the housing ladder for different demographics. A typical Homes for Later Living development which consists of 40 apartments therefore results in 80 additional moves further down the chain. If 30,000 later living properties were built per year (10% of the Government’s overall housing target) this would mean 60,000 or more additional house moves are facilitated each year.

Roughly two in every three retirement properties-built releases a home suitable for a first-time buyer. A typical Homes for Later Living development which consists of 40 apartments therefore results in at least 27 first time buyer properties being released onto the market. If 30,000 Homes for Later Living properties were built per year this would be 20,000 first time buyer properties being released each year.

Expanding the provision of retirement housing would have benefits for both state savings and the happiness of older people. Previous research by WPI Economics found that a person aged 80 living in a retirement community feels as good as someone aged 10 years younger in the general population. Much of this improvement comes through a greater sense of life satisfaction and reduced levels of anxiety. Furthermore, the health and social care saving to the state from this improvement is c.£3,500 per person per year. This derives specifically from fewer falls, reduced loneliness, delaying the onset of dementia, quicker detection of strokes and lower use of social care services.

How can the adult social care market be incentivised to compete on quality and/or innovation?

There are two key ways that the adult social care market can be incentivised to compete on quality and innovation:

To incentivise quality and innovation, we firstly support the adoption of a Help to Move’ package for older people.  This could have several elements, including reforming Stamp Duty for older people downsizing and moving into specialist retirement properties.


We believe that removing or reducing this charge would be cost-neutral; while older people would pay no stamp duty for rightsizing, the Treasury would recover the loss by unlocking housing chains and by triggering home improvement work.  


We also encourage the Government to endorse private sector partnerships aimed at delivering both quality and innovation. Last year we announced our partnership with Anchor Hanover, England’s largest not-for-profit provider of specialist housing and care for people in later life. The partnership will deliver 482 units across five large-scale sites in Hampshire, Leicestershire, West Yorkshire, Greater Manchester and Cheshire throughout 2020 and 2021, and we hope to bring forward more sites together in future. The partnership is designed to innovate the adult social care sector through providing more affordable retirement housing to fill this gap in the market.



March 2021

[1] WPI Economics: Homes for Later Living: Unleashing the Grey Pound (2021)

[2] WPI Economics: Homes for Later Living: Healthier & Happier (2018)