"The present is good, the future is rosy," says Peter Askew, chairman of the Retirement Housing Group, and chief executive of retirement homes developer Pegasus (see "Cosying up" on page 50 for more info). "At the moment there are only 150,000 private sheltered apartments in the UK," says Askew.
"Yet the number of people out there is staggering."
At the moment, retirement home customers are asset-rich with traditional investments, such as money in a building society account. This is about to change. If the numbers out there now are staggering, the market will go into overdrive in 2010 when people with occupational pensions come on to the market. "In 2010, there will be an enormous percentage of people with occupational pensions in the market," says Askew. Added to this will be people with enormous amounts of inherited wealth as a result of the housing boom.
Askew also points to a new trend in the retirement homes market, which may see the market expand still further: people are buying two retirement homes, one to spend the summer in, one for the winter. "People are buying places they can lock up half the year; they buy in Spain and in the UK," he says.
The market is dominated by McCarthy & Stone, with a 65% share. But demand is growing faster than supply, so prices are rocketing and others are looking for a piece of the action. Pegasus has been a serious player since a management buyout six years ago. This year the company expects a turnover of £33m and by 2009 is hoping this will grow to £100m.