Tenure and dementia in housing with care

Transcription

1 Tenure and dementia in housing with care Ian Laight Director, Housing Research consultancy

2 Mixed tenure v rent? Is this the wrong starting point? It s really not that clear cut, why do we shoehorn people into rigid general needs based tenures Why do we expect to fix tenures for people who may experience 20 years or more of profound changes in their lives Most older people will choose to stay put in later life, soldiering on in unsuitable circumstances, if we fix tenures in housing with care then we perpetuate one of the greatest constraints on quality of life and choice in later life trapping people s equity and limiting their incomes Surely housing with care is all about ageing in place, a home for life So shouldn t tenures be flexible rather than a constraint on the occupier s ability to maintain independence and provide the choice and control that personalisation of social care intended? A wider choice of tenures also means a bigger catchment population its good risk management Offering additional services extends the reach of housing with care, extending occupancy periods It can improve the fill up rate & operating surplus of schemes, the number and type of funders that you can access, the size of debt that can be serviced, and speed at which debt can be paid down

3 Tenure changes with age already The proportion of owner occupiers in the population already reduces with age: ONS (2001) tenure figures for Devon Home owners Social tenants Private tenants People aged % (92,600 pop) 10.3% 6.3% (5,834 pop) People aged % (57,400 pop) 13.2% 8.2% (4,707 pop) People aged % (26,600 pop) 14.0% 11.4% (3,032 pop) Overall shift 65 to % +3.7% +5.1% So, is home ownership bad for life expectancy, (29% survival rate v 52% for private tenants) or do - Older people have differing priorities and needs Owner occupation becomes less appropriate with age and changes in needs It will be even less appropriate for the coming generation of equity rich / cash poor retirees affected by; forced early retirement; below forecast pension funds; low annuity rates; and longer life expectancies - The future means less cash for a longer life it s already happening in the US retirement market

4 Our priorities change Housing is Discretionary your product and service competes with general needs stock NEEDS Multiple models along the Specialist Housing continuum LOCATION PRICE Care is Needs based consistently good services are essential

5 Achieving increased flexibility, longer occupancy and more choice in extra care Outright sale puts all your eggs in one basket and is too rigid to suit all long term occupants No doubt that home ownership is still the tenure of choice at the housing / discretionary end of the spectrum but the housing market remains tough and unpredictable, sales take a long time to complete Owner occupiers will increasingly need to release equity - staircasing down through the scheme operator is far preferable to all involved when compared with conventional equity release So we should included unit recycling in appraisals, use pre-emption or buy back clauses to gain control of voids and maintain the quality of schemes by updating units and re-presenting them to the market Bundled in services will transform appraisals from development to operational models Service rich schemes have greater potential to retain residents for far longer occupancy periods and achieve the prevention & delay of admission to registered settings that we are seeking Schemes that rely on sales revenue alone to meet their costs miss the opportunity to benefit from operational revenue generated by services (food, drink, housekeeping, laundry and support not care) Extra care is also ideal for short term intermediate care uses assessment, rehabilitation & respite

6 Examples of flexible tenures Offer staircasing down to provide residents with equity and the option to switch to a market rent Consider non mainstream tenures, eg deferred charges / exit fees / lifetime lease Lifetime lease is effectively a rolled up Private Rent payment paid by the occupier on entry to the property and entitling them to occupy this until they die. The rent payment is calculated based on the occupier s individual life expectancy plus a small risk contingency. This can be either through a full actuarial assessment or a simple interpretation of life tables, based on age and gender with adjustments for health and lifestyle. Operators receive vacant possession of the property on the death of the occupier. Some agreements include other triggers such as changes in need which require the occupier to move to more specialist provision, eg a mid or advanced stage dementia. This form of tenure is especially cost effective for people entering schemes above the age of 75, as it can reduce the entry price by 60-70% when compared to Outright Purchase. The initial lump sum payment creates cashflow advantages for the operator, when compared to lettings, and a basket of Lifetime Leases averages out the risk of variations in occupancy periods for the operator. Funding and tenure are inextricably linked

7 Elephant in the room - Dementia Housing with care can be suitable for end of life occupancy if operators are willing Long term / chronic / multiple conditions can all be accommodated in housing with care to end of life However, dementia is the limiting factor in who can stay in housing with care to end of life Perceptions and understanding of dementia vary among commissioners and providers, just as dementia itself is a very varied experience Opinions vary in how far you can stretch housing based / unregistered dementia provision can we have low level dementia housing that fills the gap between housing with care and registered care or can we go further without incurring registration issues or overlapping with health responsibilities? And, what form should new registered dementia care accommodation take do we need large specialist schemes or can we provide something smaller, more dispersed and more domestic in character Housing with care does not spell the end of registered care just a future with more specialised provision of the latter

8 Thank you Ian Laight and