LREF 2024: Opportunities and challenges for multigenerational living in UK-wide regeneration

Multigenerational housing is playing an increasingly important role in new development opportunities, particularly in medium to large-scale regeneration schemes across the UK.

The demographics are well-established. Our population is ageing – by 2030, it is estimated that around 23% of the population will be over 65 years old, compared with 18% today. Students, including those from around the world and especially in major cities, continue to make up a large proportion of renters.

Combine this with the urgency of affordability and concerns about house prices, mortgages and cost of living, and alternative living formats that offer stability and quality without the financial burden of ownership come into their own.  

Developers are less focused on for-sale homes as a result. Putting significant proportions of private ownership in larger schemes is a risk; we’re seeing many developments originally planned this way that are moving to be wholly or majority build-to-rent (in all its forms).

Development funding, too, is moving in this direction – away from conventional debt-led structures towards institutional forward funding. This approach is attractive, reducing funding risk for developers and providing more opportunity for investors. It also opens up new opportunities for equity-light and/or equity-tight developers.

Growing empirical evidence suggests that multi-generational living not only creates sustainable living environments but also enhances overall wellbeing. Families and other wider groups residing together report better mental health outcomes, reduced loneliness and improved emotional support systems.

In addition, delivering more purpose-built accommodation such as later living or student accommodation frees up existing housing stock for young families, while providing a better quality of accommodation for their residents. The investors in these alternative living products are often long-term stakeholders and are therefore able to take a stewardship approach to new communities.

If factored in effectively and early enough, regeneration projects can drive the integration of multi-generational options into broader housing strategies. This also provides the opportunity for greater speed of delivery, which is often a key objective for public sector stakeholders in regeneration projects. A diversified scheme providing multiple alternative living products, such as later living or residential for rent, allows for greater pace of absorption and delivery of masterplans earlier.

We know this is beginning to happen already organically. But how can we plan and manage this process better, and from a place-based perspective, to create more value for all involved?

There is a challenge too for developers. Very few have the capability and track record of delivering mixed living products of this nature on the same site. The ability to piece together a mixed tenure community with different elements being sold to different investors is understandably not their main skillset. Are they investing the right time and energy to make sure it’s all coherently packaged together from a design and operation perspective? What else is needed – and where can additional support be found?

How can we bring these assets together coherently and manage them long-term, with the right level of stewardship for residents as well as funders?

Affordable housing is now one of the hardest pieces of the jigsaw. With a focus on their current estate, registered providers are buying around 10% of the s106 stock that they were five years ago. What role should affordable housing take right now and in the short to medium term? If there is a greater role for the for-profit sector, what might be the long-term consequences of this from a place perspective? 

But mixing tenures, age groups and characteristics, and creating communities with more life and interaction – however challenging to deliver – must be the right thing to do. A collaborative approach involving government, developers, advisers and community stakeholders is needed and places to share approaches, ideas and best practice – such as LREF – are essential.