Just 2.6% of the UK housing stock is classed as a retirement property despite significant demand among older people, according to Knight Frank.

Analysis of data from the Elderly Accommodation Counsel found around 715,000 homes loosely classed as ‘retirement housing’, ranging from age-restricted developments to close care housing, while separate research by Knight Frank found that 25% of over-55s said they would consider moving into purpose-built retirement housing in the future.

Knight Frank’s latest Retirement Housing report said some 7.8m people, or 18% of the population, is aged over 65, with 12% of the population aged 70 or over. It points out that providing more suitable property for older needs could also free up wider housing stock.

Emma Cleugh, head of institutional consultancy at Knight Frank, said: “Increasing the provision of housing suitable for older people will have direct benefits across the whole housing market, for all generations.

“There is significant appetite in the market to develop and invest in the retirement housing sector and provide specialist and aspirational housing that the older generation now demands.

“Now that the resolution of the OFT and Law Commission investigations into event fees in the retirement housing sector looks to be on the cards, we anticipate significantly increased levels of activity across the sector.

“However, it remains to be seen whether the scale of investment will begin to re-balance the current mismatch between supply and the pool of demand in this market.”