A study carried out by the Savills Retirement Living Team found that lower levels of equity available to downsizers to spend on their next home is also among a number of challenges facing this market.

It calls for a more collaborative and creative approach involving landowners, planners and developers is required to cater for this growing group of home owners.

Carole Mackie, head of Savills Retirement Living business in Scotland, said: “With a growing older population who have a pressing housing need and equity to invest, not only is there a commercial opportunity, but a corporate responsibility for the planning and development sector to address this important market in Scotland.”

Savills research states the number of people aged over 65 is set to increase from 550,000 to 1.4 million by 2037, an increase of at least 100,000 every five years. This unprecedented level of growth will be seen all over the country and will have important implications on housing across Scotland.

The findings reveal that the average transaction value in Scotland (March 2016) was £166,624, compared to £250,000 across the UK as a whole. Therefore, whilst a considerable number of over 65s own their property outright in Scotland, it is unlikely that large amounts of equity will be released when sold.

Carole Mackie added: “The sale of the family home in Scotland often generates lower levels of equity for downsizers and retirees compared to other parts of the UK, which simply means this target group of consumers have less to spend. Therefore a model that works in say London, Bath or Bristol cannot simply be replicated in Edinburgh or Glasgow. The challenge for developers operating in the retirement sector in Scotland will be providing desirable properties at attainable prices.

“A two-tier approach is required which will cater both for downsizers operating at the top end of the market, but also for more modest retirement housing. So, although there are challenges for developers in terms of value, the demographics indicate a huge untapped opportunity for the right product for the right buyer.”

According to the research, Scottish planning policy has provided a further challenge, yet could also play a pivotal role in addressing the impact of demographic changes on housing demand.

Savills planning specialist Natalie Antonelli said: “The demand for housing land has never been greater, and the planning system is key to unlocking the potential for delivery.

“The Scottish Government explicitly requires local authorities to meet the housing needs of older people. Despite this, there is no definitive and specific planning policy to deliver retirement housing, and as a result we are seeing an inconsistent approach to local planning authorities’ interpretation and application of SPP, particularly in relation to developer contributions, policy preparation and also the inclusion for specific retirement housing in HNDA’s. It is encouraging that the review of the Scottish Planning system, published last month (May 2016) has highlighted the need for future proofing in relation to this issue: specific retirement living policy is now required to take this forward.”

Finally, developers must compete for prime development land in high demand locations.

Carole Mackie said: “The downsizer market is driven by aspiration; the desire for a high quality, mortgage-free lifestyle in desirable areas, often near the family home, family members and good local amenities.

“However, retirement providers are able to compete against traditional house builders, due to opportunities for schemes comprising denser layouts with reduced parking requirements.”

Henry Lumby, head of UK Retirement Living for Savills said: “Scotland, and indeed the rest of the UK can learn great lessons on the delivery of substantial levels of retirement housing from Australia, New Zealand and America – these countries have been able to deliver homes allowing people to age in desirable places, across different price points and tenures. The key driver has been a planning system that supports retirement housing, and funding to allow the developments to be built.”