The Pros and Cons of Retirement Villages

What are retirement villages? Retirement villages (or retirement homes) are property developments built especially for older people. They provide high-quality homes for those who wish to live independently in a safe and comfortable environment. They usually offer a range of different accommodation types, including houses, bungalows and apartments, and are often located in attractive settings. Most retirement villages promote a luxury lifestyle, offering a variety of leisure facilities, such as swimming pools, restaurants, and bars, plus the opportunity to enjoy social activities within a community of people of a similar age. While the number of people living in these types of developments is relatively low in the UK, the market is growing steadily, and many more villages are expected to be built over the coming years. Properties in retirement developments are often considerably more expensive than homes on the open market. Research by the real estate company Jones Lang LaSalle suggested that, on average, a retirement apartment in England cost around 17% more than a standard apartment of the same size in 2018.

So should I choose Retirement villages or sheltered housing: what is the difference? At a basic level, retirement villages and sheltered housing are similar. Both offer housing designed for older people who want to continue living independently. But there can be significant differences between these housing options. Retirement villages offer premium facilities in an attractive environment and, as a consequence, are usually more expensive than other options. They are generally aimed at people who want to enjoy an independent lifestyle; they may not be suited to people who require a higher level of support or supervision. Although some developments do provide access to additional care and support – at an extra cost – so it’s worth investigating all the options within retirement villages. Sheltered housing is often operated by local authorities, housing associations or charities, while retirement village properties must be bought or rented privately.

So Do retirement villages offer care and support? The majority of properties in retirement villages are designed for independent living, but some do provide care and support for those that need it. For example, some schemes include assisted living apartments. Others offer access to a service that can provide home help or personal care. Most retirement villages provide facilities to promote general health and fitness, including gyms, exercise classes, massage and physiotherapy. If you’re thinking about a retirement home, make sure that it offers the kinds of care and support you require, and think about future care needs if possible. If you’re moving into a scheme that offers a bespoke home care service, find out if you would be required to use the scheme’s own service should you need extra support in future – or if would you be able to choose your care provider if you wish?

So what are the upsides? • Freedom: The freedom to live independently in your own home as you do at the moment. • Facilities: No need to go anywhere else for your leisure facilities. • Staying together: Your new home could be suitable for couples as well as individuals. • Making friends: Meeting new people outside of your current circle of friends and family. • Enjoyment of communal areas - no responsibility to maintain gardens or facilities. • No hassles with repairs or maintenance:

These are usually dealt with by the scheme provider. • Safety: Life in a retirement village may feel safer than living alone. • Guest suites: Some villages have apartments available for friends and family to rent when they come to visit. • Future care: Some offer access to home help and personal care services or even an on-site care home.

What are the downsides? • Limited medical care: Not all retirement villages provide access to nursing or medical care. • Cost: You pay more for luxury – homes in retirement communities are generally more expensive than properties on the open market. • Private funding: Most retirement village properties must be bought or rented privately and are not eligible for public funding. • Service charge: Most charge monthly or annual fees for maintenance and facilities.

All of the above pros are not free. • Extra fees: There can be some unexpected costs, including exit or transfer fees when you sell. • Reduced space: There may not be space for all of your current possessions and furniture. You may have to sell or give away things you love. • Lack of diversity: Some people might not want to live solely with other older people.

Hidden costs of retirement homes Before deciding to move into a retirement village, make sure you’re clear about all of the costs and fees involved, as these can be significant. Maintenance fees and service charges If you move into a retirement village you will be charged a regular service charge, which covers running costs and maintenance of the development. Typically these in 2020, range from £190 to £840 a month, depending on the operator, location and facilities on offer. You are nor exempt from council tax and utility bills, which are usually paid separately to the council/ utility companies.

Event fees Event fees are some of the most controversial charges included in retirement property contracts. Retirement properties are usually sold on a leasehold basis. The lease often requires the owner to pay a fee for certain ‘events’, such as selling, sub-letting or transferring ownership of the property. These event fees (also known as exit fees or transfer fees) are additional charges built into the lease that you would not expect to encounter with a standard property. Don’t get caught out here – they vary between 1% to some resale fees at 30%!

Lease renewal If the lease has less than 80 years to run it will prove costly to renew and the property’s value will also suffer. Check the length of the remaining lease is acceptable before buying, always taking into consideration the length of time you could possibly be living there before the time may come to sell.

Ground rent On a leasehold property, a tenancy is granted for a long period of time. It’s usual for leaseholders to pay a large amount upfront with smaller ‘ground rent’ payments to the freeholder annually. This may be as low as £50, but is usually around £300 to £500 a year.

Conditions of sale When reselling a retirement property (usually when the owner dies or goes into full-time care), you will usually have a choice between using an estate agent or the operator’s own in-house sales service. Be aware that some freeholders make it a condition of sale that you must resell through their company, so check the terms before buying. Remember that the monthly service charge will usually need to be paid until the property is sold, so bills can mount up if a sale drags on.

Always use your own solicitor when purchasing a leasehold property. Then all of above charges will be pointed out to you in plain English. n