A crescendo of nursery rhymes is not what you’d expect to hear in an care home for older people, but arriving at Nightingale House in south London, you can hear the children before you can see them.

“Isn’t it fantastic? It’s the highlight of my week,” says 89-year-old Fay Garcia, while bouncing baby Sasha on her knee. “It’s like being reborn.”

Garcia never had children but is one of the regulars at the baby and toddler group. It’s been running since January in preparation for the new nursery, which opened this week.

The Apples and Honey Nightingale nursery, run by founder Judith Ish-Horowicz, is the first of its kind in the UK. The concept of intergenerational care began in 1976 when a nursery school and a care home were combined in Tokyo. Since then, there have been successful schemes across Europe, Australia and the US. In Singapore, the government has committed £1.7bn to initiatives to improve ageing in the country, including 10 new intergenerational housing developments.

The UK is still catching up with the idea, says Stephen Burke, director of United for All Ages. For seven years, the development agency has worked with a range of organisations – including local authorities, housing providers, care homes and community centres – to encourage them to think more broadly about opportunities for combining care.

Interest is growing. Burke expects the UK’s first housing development for students and older residents (as seen in the Netherlands) to launch soon, and representatives from Torbay council in Devon will travel to the US this autumn to see examples of best practice. Nurseries are run near to care homes in cities such as Chichester and Edinburgh, but Apples and Honey is the first to run a nursery within a care home itself, with daily joint activities for the children and residents including exercising, reading, cooking and eating meals.

“[It’s] about bringing people together,” says Burke. “By getting people talking to each other, you break down some of the barriers and challenge some of the stereotypes [particularly around ageism, dementia and other conditions affecting older people]. We see this having benefits for all generations.”

Ish-Horowicz came up with the idea many years ago after bringing children from her first nursery in Wimbledon to visit Nightingale House each term. The new nursery, housed in the care home’s refurbished maintenance block, has 30 places for two- to four-year-olds and a number of spots reserved for the children of care home staff.

“Everyone I’ve spoken to loves the idea,” says Ish-Horowicz. The Ofsted registration process went smoothly, although there were issues finding insurance: “We had to explain to them that we weren’t going to leave the children in the care of the residents (or the other way around), and they didn’t all need to be DBS checked,” she says.

Ish-Horowicz’s proposal came when the home was reassessing its own approach to care, says Simon Pedzisi, director of care services at Nightingale House, who had consulted students of medicine, occupational therapy and nursing for new ideas.

“Our average age on admission is 90, so we have to think in an innovative way about activities,” says Pedzisi. “[Care] has to be more meaningful, deeper and measurable. It’s about social interaction because that’s what older people really [need].”

When care for older people faces staff shortages, funding cuts and estimates that another 71,000 care home places will be needed by 2025, it’s understandable that innovation is in short supply. But Pedzisi insists that any extra money needed to support the nursery will be well spent.

There can be economic benefits for care homes considering sharing their sites, says Burke, including gaining additional rent and sharing administrative, ground maintenance and catering costs. Co-location can also improve recruitment and retention of staff, who take advantage of flexible on-site childcare or find satisfaction in the increased variety in their roles.

The health benefits of alleviating residents’ social isolation may also lead to savings elsewhere. “If people are well stimulated and live meaningful lives, they’re going to eat well. They’re then at less risk of dehydration and falling, therefore you’ll lower the risk of hospital admission,” says Pedzisi.

Increased social interaction is linked to a reduced risk of disease in elderly people, which was recently highlighted in Channel 4’s Old People’s Homes for 4 Year Olds documentary. Eleven residents of Bristol-based St Monica Trust were found to have improved moods, mobility and memory after spending six weeks with children. The trust has since committed to adding a full-time nursery to one of its residential care homes, playgrounds at a number of other sites, and is developing a new retirement village.

“We’ve always done intergenerational activities, but we wanted evidence so we could roll out wider programmes,” says David Williams, the trust’s chief executive. “It has created a buzz and a feeling that we can do things differently. It’s also had an impact on our staff. If you’re working in an organisation you feel is [making a difference], you want to be part of that innovation.”

As Apples and Honey Nightingale welcomes its first class of nursery children, Ish-Horowicz is optimistic for the future of intergenerational care. “There’s such a positive feel around this; you know it’s going to work,” she says. “It’s about learning through generations and caring about each other. This kind of thing can change society and the community.”

Join the Social Care Network for comment, analysis and job opportunities direct to your inbox. Follow us @GdnSocialCare and like us on Facebook. If you have an idea for a blog, read our guidelines and email your pitch to socialcare@theguardian.com.

If you’re looking for a social care job or need to recruit staff, visit Guardian Jobs.