Unlocking Affordability: Optimising design and build cost for Integrated Retirement Communities

The UK’s Integrated Retirement Community (IRC) market is facing a significant affordability gap, with average prices for retirement dwellings far exceeding the national housing average. The price of an IRC apartment can begin in excess of £300,000, depending on location, amenities and services provided, reaching over £800,000 in more urban or affluent locations such as London. In comparison, the UK’s average house price is approximately £270,000, while the London average stands at around £560,000 at time of writing. This comparison highlights the premium positioning of IRC developments and the need for thoughtful approaches to affordability within the sector.

Despite increasing demand driven by a rapidly ageing population and a growing interest in downsizing among older homeowners, the supply of mid-market, modern senior living options remains limited. At present, only about 1% of people over 65 live in an IRC, whereas in more mature markets such as New Zealand and Australia, it falls closer to 6%, highlighting the shortage of supply of this housing model. Currently, there is an emphasis on bespoke, high-specification developments with premium facilities, which further increases already elevated build costs, contributing to higher sales prices. While there is demand for such developments, they simultaneously place IRCs beyond reach for many older adults.

Streamlining IRC Development and Operations

Average build costs for IRCs are typically in excess of £300 per square foot (psf), with premium schemes in London exceeding £400 psf. These developments often include enhanced specifications and high-end amenities such as swimming pools, cinemas, spas, libraries, restaurants, and bars. While quality and suitability for residents are essential, opportunities exist to reduce costs through more streamlined design, construction and scrutiny of facilities and specification.

Design and Construction Efficiencies

Insights may be drawn from the Built-to-Rent (BTR) sector, which has demonstrated success in delivering mid-market developments at scale. The average build cost for BTR schemes is lower, typically starting closer to £220 per square foot. While a great portion of BTR stock remains high-end, the sector’s increasing focus on mid-market offerings has met with strong interest and has contributed meaningfully to housing delivery. Recent developments have seen a reduction in amenities and a focus on product design, contributing to greater affordability to drive uptake.

In the context of IRCs, cost reductions can be achieved through thoughtful design and construction strategies. While IRC developments in the UK are not yet being built on scale, modular design principles, particularly for high-cost, labour-intensive components like bathrooms, present a clear opportunity. Further savings can be realised through simplified roof structures and the consideration of specification for communal areas and balconies. Finishes and decorations alone typically account for around £30 psf in IRCs, making them one of the more significant cost contributors. Bespoke construction elements also tend to drive up costs and should be carefully assessed for necessity.

Optimising Amenities and Operations for Cost Efficiency

Amenities are another area suitable for cost optimisation. While features like pools and spas appeal to some, they are not universally expected. In urban settings, where residents have convenient access to local amenities such as cafés, libraries, and fitness centres, the need for extensive on-site facilities may be reduced. This opens opportunities to simplify schemes and focus investment on core services and flexible communal spaces. However, where scale can be achieved by developing urban schemes with a greater quantity of units, then the cost of the pool and leisure facilities can be spread to ensure viability and reduce annual running cost per unit.

Additional operational efficiencies can be achieved through design and layout choices that reduce complexity and support scale. For example, operators can streamline costs by offering a limited set of customisation options, such as kitchen layouts, enabling bulk procurement and simplifying installation. Multi-use communal spaces, such as a village hall that doubles as a fitness facility or activity room, reduce the need for dedicated rooms and associated fit-out costs. Staffing requirements are also closely tied to amenity provision; for instance, reviewing restaurant hours or consolidating services can help manage labour costs without compromising resident experience.

These approaches align with the recommendations of the Older People’s Housing Taskforce, which advocates for middle-market design specifications, modular construction, proximity to existing community amenities, and the use of economies of scale in larger schemes to reduce both build and operational costs. Together, these strategies offer a pathway to more affordable, scalable, and inclusive IRC development.

Leveraging Technology as a Cost-Saving and Experience-Enhancing Tool

Providers are increasingly integrating smart technologies to improve the resident experience while delivering operational efficiencies, enabling more efficient staffing and operational costs. Motion-sensor lighting systems, for example, can detect inactivity or potential falls, enabling timely support and enhancing peace of mind for residents and families. AI-powered platforms are also being introduced to support daily routines, medication reminders, and facilitate communication between residents and staff.

While there is an initial investment in implementing these innovations, it facilitates the streamlining of operations and reduces the reliance on manual processes, contributing to measurable cost savings without compromising service quality. In IRCs, technology is being used to complement human support, creating safer, smarter environments that promote independence, wellbeing, and more efficient service delivery.

Delivering High-Quality, Mid-Market IRCs

A number of senior living operators are already demonstrating how high-quality IRCs can be delivered at more accessible price points, balancing thoughtful design, sustainability, and community integration without relying on excessive amenities or bespoke finishes.

Audley Villages opened Mayfield Watford in 2022 to cater to a mid-market demographic. It has over 250 units which are smaller in size than Audley’s typical developments. The development includes a swimming pool and leisure amenities, albeit with scaled back central facilities. These design modifications, in combination with a larger site facilitating economies of scale, have enabled units to be sold at a lower price point in line with average local house prices.

In contrast to Mayfield Watford, Adlington Retirement Living typically develops on a smaller scale with schemes averaging 60 units. They have adopted a model that supports a mid-market proposition. Their developments are designed with more modest specifications and a range of amenities such as therapy and activity suites, restaurants, salons and shared spaces designed to encourage social engagement. Adlington Retirement Living communities tend to be strategically located near town centres which allows easy access to further amenities and transportation. They typically adopt a modular design in development which helps control costs, enabling them to deliver high-quality developments without overextending on bespoke features.

Unlocking the potential of a Scalable IRC Model

The senior living market stands to benefit from a more mid-market, scalable approach. By adopting a pre-specified, standardised method, similarly seen in the BTR sector, developers may be able to achieve economies of scale, streamline construction, and reduce overall costs. Emphasising cost-effective design engineering, such as modular design and efficient layouts, could help lower the price point of IRC units, making them more accessible to a wider demographic of older adults.

Technology also has a growing role to play in enabling smarter, safer environments while supporting operational efficiency. When thoughtfully integrated, digital tools can enhance resident wellbeing and help operators manage resources more effectively, without compromising service quality.

This shift is considered essential not only for addressing the affordability gap but also for enabling the sector to grow at the pace required to meet the UK’s demographic and social care needs. A more inclusive, cost-effective IRC model would unlock the health, social, and economic benefits of senior living for a broader group of older people, supporting healthy ageing and helping to free up family homes, contributing to the wider housing market. Without such changes, the potential of IRCs to serve as a meaningful solution to the UK’s ageing population may remain limited to only the wealthiest retirees.