McCarthy raises investment plans to £2bn as the sector recovers

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McCarthy & Stone, the UK’s biggest retirement home builder, has raised its investment plans to £2bn over the next four years as it benefits from a recovery across the industry.

The Bournemouth-based group upped its former £1.5bn four-year investment plan, set last September, as it plans to build more homes and buy more land.

The group, which controls about 70 per cent of the owner-occupied retirement homes market, said it expects to benefit from UK demographics.

The number of people aged over 85 is poised to double by 2030 and the number of over 65s is expected to rise by 51 per cent, according to a report published last year by think-tank Demos.

The survey added that a quarter of those over 60 are interested in retirement living, yet only 1 per cent of older owner-occupiers currently live in specialist retirement housing.

McCarthy & Stone said it planned to double in size and develop more than 3,000 units a year over the medium term.

In June, it opened its first new regional office in 14 years, catering for north London, Buckinghamshire, Bedfordshire, Hertfordshire and Essex.

Chairman John White said: “We are raising our investment target for land and build to £2bn over the next four years in order to respond to the significant nationwide need for high-quality, specialist housing for the growing number of over 65s who are looking to downsize.”

The boost in investment comes on the back of a trading update that saw sales jump by a quarter to £389m in the year to August 31.

The privately-owned firm saw legal completions lift 10 per cent to 1,677 homes, while average selling prices jumped 16 per cent to £214,000.

The business added it had acquired around 2,500 new plots since last September, and expects its full-year results to beat management expectations.

The group is owned by a consortium that includes Goldman Sachs, Strategic Value Partners and TPG.

It was founded by John McCarthy and Bill Stone in 1963 and began specialising in building retirement homes in the 1970s.