Retirement Properties for the over 55’s and 60’s

retirement properties

Retirement Properties for the over 55’s and 60’s

We are all living longer. According to the Office for National Statistics, women tend to live around 20 years after they retire, and men 15 years. Because of this, the market for retirement properties has grown noticeably in recent years, with more people freeing up cash by selling their former family home.

Residents in retirement properties must typically be aged over 55 or 60. Properties are generally sold on a leasehold basis, which means the resident has a tenancy granted for a long period of time, usually 99 or 125 years, but many new-build retirement properties come with a 999-year lease.

Unless you pay to extend a lease, it reduces in length, so after 30 years, a 125-year lease becomes a 95-year lease. And is sold at its reduced length when the property changes hands, although it may be possible to extend either at the time of purchase or afterwards following two years of ownership.

If a lease is not extended and runs out, the resident may be allowed to stay in the property on the same terms or their landlord may grant a rolling tenancy. If the landlord insists on having the property back at the end of the term, they will require a court order to evict the resident and can only do so on certain grounds.

Leaseholders typically pay something called “ground rent” each year, which may be as low as £50 but can also be £300 or more. It is important to note that ground rent can increase over time, so you should take the time to understand any charges and how often increases occur before making a financial commitment.

Besides the ground rent mentioned above, leaseholders also pay regular service charges to cover the costs of the services provided by, or on behalf of, the landlord. These charges can be significant, particularly in retirement properties, where additional services are very often provided.

The difference between retirement properties and sheltered housing

On the face of it both seem similar, and both offer housing for older people who wish to live independently. But there are differences between these housing options.

Retirement properties in apartment complexes usually offer premium facilities in an attractive landscaped environment, and, because of this, are more expensive than other options. They are mostly aimed at those who want to continue enjoying an active independent life, so they may not be suitable for people who need a higher level of support. Although some retirement apartment complexes provide access to additional support and care, these are always at an additional cost, so it is worth finding out how much such costs are likely to be.

Sheltered housing tends to be operated by a local authority or housing association, although this is not always the case, while retirement apartments must either be rented or bought privately.

Hidden costs associated with retirement properties

 Maintenance fees and service charges

Services and service charges vary from place to place, but include things such as:

  • Cleaning and general upkeep of communal areas such as halls or meeting rooms, and grounds outside.
  • Communal or structural repairs

The resident will be responsible for repairs inside their apartment and arranging contents insurance. However, residents are likely to have to contribute towards something called a “sinking fund” or reserve, to cover expensive or unexpected work.

  • A scheme manager service
  • The provision of an emergency alarm and the upkeep and repair of it
  • Management fees

The company managing the retirement complex may charge a fee for providing staff and overheads in relation to the scheme’s administration. The management organisation is only obligated to provide the services set out in the lease.

For a one-bedroom apartment, you can expect to pay between £1,500 and £3,000 per year. However, if extra care is needed, or the complex is classed as a luxury sheltered property, then the charge can be as high as £10,000 a year.

Rights around service charges

Residents have rights around charges that are “variable”. This means they are not fixed as part of the rent and there is also a legal right to request a summary of the service charge account. The summary provides details of the costs incurred over the last accounting period, how the costs relate to the charges being demanded, and whether any costs relate to works which have been funded by a grant.

If you have obtained a summary, you then have six months to ask to inspect the full accounts, receipts and any other documents, and make copies if you wish to do so. In law, costs can only be recovered from residents, “to the extent that they are reasonably incurred if the services or works are of a reasonable standard.”

Residents also have the right to challenge the reasonableness of their service charge at a Tribunal.

Before buying a retirement property, it is wise to find out how the complex is managed, as this can affect your future finances. Also, find out about what happens about the service charges and maintenance fees if you die. Often, retirement properties are put on the market when the owner dies, but the service charge continues to accrue and be charged until the property is sold. The upshot of this situation is that thousands of pounds in fees can mount up while your relatives try to sell the property. In some cases, this burden has been put on grieving relatives.

Event fees

Event fees are controversial. They require the resident to pay for certain “events” such as sub-letting, selling, or transferring ownership of the property. These event fees are also called exit or transfer fees and are additional charges built into the lease that you would not encounter with any other type of property.

The fees are calculated as a percentage of the market value or resale price of the property. There are some schemes out there that charge more modest rates, between 1% to 3%. But others have fees between 10% and 15%. In some situations, residents face a higher fee if they have lived longer in a property, and some schemes have resale fees that can be as high as 30% of the property’s value.

Before buying, you should make sure you are clear on how these fees are applied and at what rate they are charged. Compare the rates between different providers in the area you are thinking about buying and look out for companies that are signed up to a Code of Practice which are designed to give residents greater protection from things such as event fees.

Conditions of sale

When reselling a retirement property, residents will normally have a choice between using the provider’s in-house sales service or an estate agent. Beware, though. Some providers make it a condition of sale that you use their in-house company to market and sell it. It cannot be stressed enough; check the terms before buying. As this article has previously highlighted, the monthly service charge will generally need to be paid until the property is sold, and bills can be eye-watering if the sale drags on.


Retirement properties offer a new way of living for many older people and is a wonderful way to move into later life, surrounded by support and a community without the shackles and expense of having to maintain a home. However, as discussed in this article, there are several potential issues and risks unique to buying a retirement property. Individuals considering this route should carefully consider these and consult with a property professional to ensure they do not fall foul of any unexpected fees or charges.





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