Integrated Retirement Communities: Do Residents Really Need to Own?
By Jenny Kyne, Consultant
I am genuinely passionate about Integrated Retirement Communities and the positive impact they can have on people's lives. Over the last few years, I have worked across five different retirement villages, consulting directly with residents and seeing first-hand the benefits that a well-run community can provide – from greater social interaction and a sense of community to security, independence and access to support when it is needed.
I have also spent considerable time discussing the concept with my own parents, who at 66 sit firmly within the target demographic. Those conversations, combined with the feedback I have heard directly from residents, have made me increasingly interested in not just what later living provides, but how we structure and pay for it. I believe there is a significant opportunity for rental to become a much greater part of the UK later living market, complementing current ownership models and giving residents greater choice over how they access later living.
The UK later living sector has evolved significantly. Integrated Retirement Communities now offer far more than age-appropriate accommodation, combining high-quality homes with community, amenities, security, support and, where required, access to care.
Yet while the lifestyle proposition has developed, the predominant tenure model remains relatively traditional: residents sell their existing home and purchase another.
For many residents, ownership will remain the preferred choice. But as rental continues to grow across the wider residential market, it raises an interesting question for later living: could rental provide another route to accessing the same lifestyle, without residents necessarily needing to own the property?
There are signs the market is beginning to explore that question. Knight Frank reports that the number of Seniors Housing units where market rent is the primary tenure increased by 24% over the five years to 2025, while 62% of the private Integrated Retirement Community operators included in its research already provided a rental tenure.
Rental remains a relatively small part of the private later living market, but it could address some of the fundamental barriers residents experience when moving into, living within and eventually leaving retirement communities. This is not to suggest that rental should replace ownership. Rather, there is an opportunity for the sector to offer greater tenure choice, understanding different residents will have different financial circumstances, priorities and attitudes towards homeownership.
Removing the barrier to moving
Moving into a retirement community can require two major property transactions at once.
A prospective resident may have decided that retirement living is the right next step but first needs to sell a long-held family home before they can purchase their new property. In a slower housing market, that can significantly delay or even prevent a move.
This is particularly frustrating when the decision is driven by factors beyond the property itself. Someone may want greater security, more social interaction, fewer maintenance responsibilities or easier access to support. The lifestyle decision has been made; it is the transaction that prevents it from happening.
Rental changes that dynamic.
It could allow a resident to move into their chosen community without immediately committing significant capital to another property – and potentially before their existing home has sold.
The decision becomes less about “Am I ready to sell my home and purchase another?” and more simply “Do I want to live here?”
Keeping capital flexible in later life
For many older homeowners, a significant proportion of their wealth is tied up in their home. Selling a family home and purchasing a retirement property can simply transfer much of that capital from one property into another.
That may not always reflect how financial priorities change later in life.
One concern we increasingly hear from residents is the potential cost of future care. Someone may have substantial overall wealth but comparatively little accessible capital because it remains locked within their property.
Rental offers a different proposition.
A homeowner selling a larger family home and moving into rented retirement accommodation could retain a much greater proportion of the proceeds as accessible capital. That money could fund future care, support their lifestyle, meet unforeseen expenditure or simply provide greater financial flexibility.
For some residents, having control over their capital may ultimately become more valuable than owning another property.
Does retirement property need to be an investment?
Homeownership in the UK has created an understandable expectation that property should appreciate over time.
Many people entering retirement housing are selling homes they have owned for decades and which may have experienced significant capital growth. It is natural that they may expect their next property to behave similarly.
However, the resale performance of specialist retirement housing has historically been mixed. The Government's Older People's Housing Taskforce acknowledged concerns around resale values, while also recognising that performance varies considerably between schemes and operators.
This creates an interesting tension. When someone purchases a retirement property, they are effectively buying three things:
A home
A lifestyle and service proposition
A property investment
The first two are fundamental to why someone chooses a retirement community. For many residents, the third is equally important. Ownership provides familiarity, security and the opportunity to retain an interest in the property market. For others, however, taking on property investment is less important than accessing the lifestyle itself.
Rental provides an opportunity to separate the two.
The resident pays for the home, community, amenities and support they want, while the long-term property investment sits with the operator or investor.
It raises an important question: should residents have to take property investment risk in order to access the lifestyle benefits of a retirement community?
The burden of selling
Through our work with retirement schemes, we regularly hear concerns from residents and their families about what happens when the property eventually needs to be sold, particularly if a resident dies or moves permanently into care.
The burden is not only financial. Following a death, families may need to navigate probate, empty the property, arrange any refurbishment required for sale and manage the sales process itself, often at an already difficult time. Meanwhile, service charges and other ongoing costs can continue until a buyer is found.
In a slower market, this process can become prolonged and uncertain, increasing both the practical burden on families and the financial exposure of the estate.
Rental removes much of this responsibility. When the tenancy ends, responsibility for the property, any works required and finding the next occupier returns to the operator, rather than remaining with the resident or their family.
The challenge: residents still value ownership
For all the potential advantages of rental, there is an important counterargument: residents may simply not want it.
At a recent ARCO conference, a panel of retirement community residents were asked whether they would consider renting their retirement property. None said they would.
Their reasons were revealing. They were accustomed to homeownership, wanted something that was theirs and, importantly, associated ownership with security and permanence.
This should not be underestimated. For someone leaving a family home they may have owned for 30 or 40 years, moving into rented accommodation can feel like giving something up, regardless of the financial rationale.
However, the perception that renting necessarily offers less security is also changing. The Renters’ Rights Act has strengthened security of tenure for renters, including through the abolition of Section 21 ‘no-fault’ evictions.
Later living rental could strengthen that security further through a natural alignment of interests. Residents want the confidence that they can remain in their home for as long as it suits them, while rental operators and investors benefit from stable, long-term occupancy.
For later living rental, security of tenure should therefore be a fundamental part of the product: combining long-term occupation with transparent rent increases and the freedom for residents to treat the property as their permanent home.
There may also be a generational element. Future retirement residents may have spent longer renting and be more accustomed to professionally managed rental housing. Knight Frank reports that the proportion of over-55s renting increased from 14% in 2008/09 to 20% in 2023/24.
Consumer attitudes may therefore change alongside the product.
Unlocking family homes
There is also a wider housing market benefit. The UK urgently needs more family-sized homes, while many older households who would like to downsize remain in larger properties because moving can be difficult.
By removing the need to coordinate the sale of one home with the purchase of another, later living rental could make that transition faster and easier. In turn, this could help release much-needed family homes back into the wider market.
Future changes to property taxation could strengthen the incentive to downsize further. Proposals around reforming council tax remain uncertain, but any shift that increases the cost of occupying larger, higher-value homes would make the availability of attractive and appropriately sized alternatives increasingly important.
An emerging investment opportunity
The same characteristics that provide flexibility to residents also create an interesting proposition for investors.
Under a rental model, the investor retains the underlying real estate and receives recurring income from occupation – a structure already familiar across operational residential sectors such as Build to Rent and purpose-built student accommodation.
Later living adds compelling demographic fundamentals. Knight Frank estimates that total seniors housing supply grew by just 4% between 2019 and 2024 and remains well below the level required to meet projected demand.
Rental therefore has the potential to broaden the customer base while creating a long-term operational investment proposition for institutional capital.
Importantly, it also creates a different allocation of risk- resale, voids and long-term property performance sits with professional investors and operators rather than individual residents.
There are challenges. Operators take greater exposure to occupancy, operating costs, asset performance and need to manage those risks effectively, while affordability for residents must remain central. Residents should not simply exchange uncertainty around service charges for uncertainty around future rent.
But if those challenges can be addressed, later living rental has many of the characteristics of an emerging operational residential asset class.
Choice may ultimately be the answer
The opportunity for rental does diminish the importance of ownership, not does rental need to replace it.
For many residents, owning their home will remain extremely important. For others, the liquidity, flexibility and simplicity offered by rental may be more attractive.
A number of our clients are already recognising this and offering residents greater optionality between ownership and rental. However, while rental is increasingly being offered alongside other tenures, the market for purpose-built, rental-only retirement communities remains in its relative infancy in the UK.
This is where the opportunity could become particularly interesting. As the sector matures and institutional investment in operational residential continues to grow, we may see rental evolve from an alternative tenure within predominantly for-sale communities into a proposition in its own right.
The opportunity is therefore not necessarily to decide which tenure is best, but to provide greater choice and develop products that respond to different residents' financial circumstances and priorities.
A mature later living market could increasingly allow residents to choose the community first and the tenure second.
Perhaps the future is about recognising that the home, the service and the investment do not necessarily need to be bundled together.
Later living has already developed a compelling answer to how people might want to live as they get older.
Rental may provide a more flexible answer to how they pay for it.
There is quite a bit of repetition in the section above and this section. Suggest merging into one section.