UK Senior Living: A maturing market poised for growth, Knight Frank reports

In this year's report, Knight Frank analysed operational data from 112 Integrated Retirement Community (IRC) schemes worth an estimated £4 billion. The communities are home to nearly 12,000 residents across the UK. The findings reveal ongoing shifts in operator strategies, particularly in the increase in the rental tenure, seniors BTR and modern institutional Deferred Management Fees (DMF), as the sector aligns with customer and investor needs.

“Operators are learning and responding to the needs of customers and optimising how they manage schemes with regards to service and amenity provision, as well as offering more optionality and choice around fees.," says Oliver Knight, Head of Residential Development Research at Knight Frank, "Growth and change come as the sector continues to navigate improving, but still challenging, market conditions, but , we are seeing a more sustainable approach to long-term investment while maintaining accessibility and affordability. This flexibility is crucial for the sector's continued growth."

Among the operators surveyed, 62% are providing rental tenure, 84% are offer sales that use a DMF. Maximum DMF caps are increasing, with 33% of schemes opening in the last five years have a maximum cap of 30%. DMF’s continue to provide flexibility and choice to customers as to when they pay for service and real estate in later life.

The data shows this model is delivering strong returns with regards to pricing, with IRC homes using DMFs outperforming the wider UK housing market. These properties have seen a 99% price increase since 2005, compared to 80% for general housing, with resale values of post-2019 stock showing particular strength.

The report also highlights the broader resilience and innovation within the sector. Despite inflationary pressures and rising construction costs, over 4,200 new IRC homes are set to be completed in 2024, with an additional pipeline of 30,000 homes under construction or approved for planning. The surveyed operators are increasingly embracing diverse tenure models, with 62% of private IRCs now offering rental options, marking a 7.5% increase from last year, alongside shared ownership schemes and other innovative approaches to broaden market access.

Tom Scaife, Head of Seniors Housing at Knight Frank, comments: “This year’s findings reveal the growing maturity and confidence in the UK’s seniors housing sector. The increase of the rental tenure, expansion of DMF structures and a strong focus on ESG, shows the sector is maturing. 

"The coming years are going to be interesting for UK senior living” Scaife adds, "There is an opportunity to drive value-add returns through development, with real values remaining down year-on-year and inflationary pressures supporting further rental growth. At the same time, financing costs are falling, construction costs are stabilising, and institutional investment in the wider Living Sector is growing. From a regulatory standpoint, several factors present additional tailwinds: the publication of Housing With Care Government Taskforce recommendations for increasing supply in the sector, improvements to the NPPF, and the re-introduction of housing targets."

Sustainability remains a top priority, with 93% of surveyed operators implementing environmental, social, and governance (ESG) initiatives. Features such as solar power (82%), EV charging stations (73%), and net-zero operations (46%) are increasingly common, reflecting the sector's commitment to long-term viability and environmental stewardship.

According to Knight Frank, the trend toward urban development continues to strengthen, with 81% of IRC homes completed in 2024 located in urban areas, reflecting customer demand for walkable communities with access to culture, services, and amenities.

Scaife concluded: "Despite challenging market conditions and rising finance and build costs this year, we have seen unwavering investor commitment to the seniors housing sector. Operators are focussed on operational efficiencies improving affordability and delivering high quality services."

ENDS

Notes to editors 

Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 16,000 people operating from 384 offices across 51 territories. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the firm, please visit knightfrank.com.