New home supply is rising — but the UK still doesn't build enough of what over-55s actually need

The housebuilding numbers — and who they are for

The Labour government has set a target of 1.5 million new homes over this parliament, backed by changes to the National Planning Policy Framework, grey belt land releases, and planning reform. New homes completions in England reached approximately 220,000 in 2025/26 — below the annual target of 300,000 but an improvement on recent years.

The problem is not just quantity — it is composition. Most new housebuilding is aimed at first-time buyers, young families, and affordable housing requirements. Purpose-built retirement housing — either retirement communities (formerly retirement villages) or age-restricted housing with appropriate design standards — makes up a small fraction of new supply.

Research from the Retirement Housing Group and Homes England consistently shows that the UK builds far fewer age-appropriate homes per head of older population than comparable European countries. The planning system does not systematically incentivise retirement housing development, and many developers find it commercially less attractive than standard residential schemes.

Why the shortage of retirement housing matters for equity release

The shortage of suitable downsizing options is one of the structural reasons why equity release demand remains strong despite the equity that homeowners hold. When a homeowner aged 68 looks at the options for moving to something smaller and more manageable, they often face:

• A limited stock of purpose-built retirement apartments in their area, typically at a premium price
• Standard smaller properties — two-bedroom terraces or flats — that are cheaper but not necessarily better suited to later-life needs and not located in their preferred community
• Leasehold retirement communities with event fees, service charges, and exit charges that reduce the financial advantage of downsizing significantly
• A stressful and unreliable conveyancing process at a stage of life when disruption is harder to absorb

Faced with these alternatives, many homeowners conclude — rationally — that staying in their existing home is the right choice. And if their home has significant equity, the question becomes how to access that wealth without moving. Equity release is the answer the market has developed for exactly this situation.

What a better retirement housing market would look like

There is broad policy consensus that the UK needs more age-appropriate housing. The APPG on Housing and Care for Older People has repeatedly called for a dedicated older people's housing commissioner, mandatory age-appropriate housing quotas in large planning schemes, and reform of the planning use class system to better accommodate retirement housing.

The government has signalled interest in some of these measures, but concrete legislative action is yet to follow. In the meantime, the market continues to rely on equity release and later-life lending as the practical mechanism through which older homeowners access their housing wealth without moving.

For homeowners who would genuinely prefer to move but cannot find the right property, it is worth staying alert to new retirement community developments in their area — and speaking to a Verity Home adviser in the meantime about whether equity release could serve their needs while they wait for the right opportunity.

Making the most of the home you have

For the majority of homeowners over 55 who choose to stay in their existing home — whether by preference or because no better alternative exists — equity release offers a way to make that home work harder financially. A lifetime mortgage or RIO mortgage could fund adaptations, supplement retirement income, help family members, or address IHT planning needs, all while you remain in the home and community you know.

A Verity Home adviser can give you a clear picture of what could be released from your property and how different product structures would work for your situation. The consultation is free and carries no obligation.