The UK will run out of homes for its ageing population if the construction industry cannot provide another 90,000 retirement homes in the next five years, a new report has warned.

According to property firm Savills, the country will need a bare minimum of 11,000 such homes a year just to sustain a projected 2pc annual increase in the number of over-65s. While provision of new homes has averaged just 7,000 a year since 2005, Savills’ analysis suggests current supply trends may meet this requirement soon.

However, meeting the needs of the growing cohort of Britons aged 75 and over will put additional pressure on retirement homes. Set to rise by 3.2pc a year over the next five years, their requirements will mean that the industry must supply some 18,000 homes a year. Neal Hudson, a Savills analyst, said: “Maintaining the existing provision of housing for older people is a minimum benchmark for how much new housing is needed.”

Savills estimates that the country’s over-65s possess more than £1 trillion of mortgage-free housing wealth. Over half of these households – around 3m –live in homes bigger than they require and unsuitable for their changing needs and lifestyle, the firm said.

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The Telegraph