INCREASING the supply of retirement homes could save the country billions in social care, according to the Bournemouth-based company that dominates the market for older people’s housing.

Clive Fenton, chief executive of McCarthy & Stone, has welcomed the government’s “determination” to fix social care, despite Theresa May’s decision to drop radical plans that were dubbed a “dementia tax”.

He says building an extra 500,000 retirement properties would save £2.6billion a year, or around 20 per cent of the cost of adult social care.

The Conservatives’ election manifesto proposed making people liable for the costs of social care at home if they had assets of at least £100,000. But the outcry over the measures led to a pledge to cap the costs of care, although a figure has not been specified.

Mr Fenton said: “The government’s focus on the urgent need to fix the social care system is absolutely right. Increasing the supply of retirement housing could save billions for the NHS and adult social care services.

“As the government considers the next steps for social care, they need to consider all elements – ditching the manifesto proposals makes wider creative thinking all the more important.

“Retirement accommodation is designed around older people’s needs, and includes private apartments, on-site support services, and large shared areas. It provides people with the independence they seek in later life while being safe in the knowledge that support is on hand should it be needed. It also helps address the issue of loneliness for many older residents, as research has concluded that loneliness and social isolation is as big a killer as obesity and as dangerous to health as smoking 15 cigarettes a day.”

McCarthy & Stone says social-rented retirement and sheltered housing is subsidised by £40,000 per home, but private owner-occupied housing for retired people is neglected.

It has proposed a package of reforms of planning policies and incentives, as well as the creation of a “help-to-move” package which would rebate stamp duty to people who downsize.

The company argues that retirement housing costs more to build than mainstream housing but its developers are required to pay as much as other builders towards infrastructure and affordable housing.

Supply of retirement housing is running at under 5,000 units a year, despite analysis suggesting there is demand for 25,000-30,000, Mr Fenton said.

The call for more retirement housing has been backed by Stuart Baseley, executive chairman of the Home Builders Federation, who said: “Whilst significant progress has been made to bring about the huge increases in output we have seen over the last three years, we are still well short of delivering the number of homes required. The new government needs to continue to develop the policy framework that allows more new, high quality homes to be delivered.”

McCarthy & Stone was founded in Bournemouth in 1977, when it built its first development in New Milton. It was floated back onto the stock market in 2015 after nine years in private hands.

It employs around 170 people in Holdenhurst Road, Bournemouth, and another 60 at its southern regional base in Ringwood.