Retirement properties guide – what are my options?

Retirement properties have grown in popularity in recent years. This is largely due to the UK’s aging population. According to the 2021 census, there are currently more than 11 million people in the UK aged 65 and over. That’s 18.6% of the population.

If you’re considering a retirement property, there are a range of different options available to you. This guide will explore the pros and cons of different types of retirement living and highlight anything you should consider before you make the move.

What is a retirement property?

A retirement property is a property aimed at someone of retirement age – generally considered to be age 55-plus.

Several generations ago, people would have remained in their current homes until their changing needs meant they needed to move in with family or to a nursing or care home. However, with more people living longer than ever before, the property industry realised people approaching retirement have a wide range of wants and needs that often have more to do with community than with care. Retirement living has become more of a lifestyle choice than a necessity for many residents.

Why might you want to move to a retirement property?

There are many reasons why people move to retirement properties. It might be that they want to downsize and are looking for a low-maintenance property that will meet their changing needs as they get older. Others may be keen to ensure they have a strong community around them as they transition into spending more time at home after retirement.

What are the different types of retirement properties available in the UK?

Independent living

Independent living offers age-specific property, but usually without any additional services or amenities. The main draw of independent living is the community it offers, with neighbours who are at a similar life stage. The location of the homes will also be carefully considered, with properties usually within walking distance of a number of amenities.

Benefits of independent living:

Independent retirement properties are all about community. Retirement is a major life transition and age-specific property provides a ready-made community with people in a similar position. Because there are few or no additional services or amenities, independent living retirement properties are likely to be similar in price to properties without any age restrictions.

Things to consider:

The main thing to consider when thinking about an independent living retirement flat or house is what will happen when it’s time to sell the property. This might happen because your changing needs mean you require a greater level of assistance, or it may be when your family comes to sell the property after they’ve inherited it.

Any property that has a limited market will be harder to sell. This means it is likely to be on the market longer and achieve a lower price than a property with no restrictions.

Assisted living

Assisted living properties offer some level of additional support. That support might be as simple as retirement flats with a warden you can call if you need assistance. Alternatively, it might be at the other end of the market; luxury retirement village developments that offer additional services such as award-winning restaurants and wellness centres.  

Benefits of assisted living:

The main benefits of assisted living retirement properties are the additional support and services they offer.

Within a retirement village environment, there may well be options for additional care to be added as and when your needs change. This means there is flexibility, and you may not have to move again as your needs increase.

Things to consider:

The more additional support and services you require, the more expensive it will be. It’s important to consider how affordable your living arrangements will be, both now and in the future.

The issue of selling on can also be an obstacle. There is a limited market for retirement properties. Many retirement property management companies will offer a resale service, so it’s important to ask about that if you’re considering buying an assisted living property.

Who can buy retirement property in UK?

Each retirement property development will have different guidelines about who can buy one of their properties, usually related to the age of the buyer. This means you’re unlikely to be able to purchase a property unless you fit those guidelines. It’s important that you thoroughly research any developments where you might buy a retirement home.

Can you sell a retirement property?

There will come a time when your retirement property needs to be sold. Either because your needs have changed and you need a greater level of care, or because your loved ones have inherited the property after you’ve passed away.

Before you move ahead with purchasing a retirement property, it’s important that you have a clear understanding of the process for reselling it when the time comes. Do the management company have their own resale service? Are you obliged to resell through the management company? How will the resale asking price be decided and will you have autonomy to decide who to sell to?

Can I buy retirement property before I retire?

Yes, most retirement developments have restrictions around age, but few will have the condition that you need to be retired.

Are retirement properties a good investment?

Buying a retirement home is rarely about an investment. It is unlikely that you will make a significant profit on a retirement property when it’s time to sell, but capital gains are not currently a given in the general property market either.

Buying retirement property is about buying a home that will meet your needs in the latter part of your life.

Can you get a mortgage on a retirement property?

Yes, you can. Few high street mortgage lenders provide mortgages on retirement properties due to the restrictions often placed on them, but there are specialist lenders who are able to provide mortgages for retirement properties. The property management company should be able to offer advice if you require a mortgage to purchase your retirement home.

Where can I find retirement properties for sale?

If you’re interested in a specific development, you can approach the management company directly and enquire about any available homes.

If you want to explore retirement developments in a specific area, most property portals have a ‘retirement properties’ filter. You can also do a general online search for retirement homes.

Can you rent retirement properties?

Yes, you can. If you’re not sure about committing to buying a retirement property, there is the option to rent one instead.

In order to rent a retirement property, you can either sell your current home or rent it out and use the income to fund your retirement rental.

Where can I find retirement properties to rent?

Retirement properties that are available to rent are usually listed on the main property portals. If you know of a retirement development in your desired location, you can also approach them directly.

How many retirement properties are there in the UK?

According to the Elderly Accommodation Counsel (EAC), there are currently more than 700,000 retirement properties in the UK.

Can I buy a retirement property to rent out?

Restrictive covenants on retirement property will usually prevent you from renting it out. However, there may be exceptions to this so it’s important to speak to the individual management company to get specific details.

If you’re looking for a property suitable to rent out to retirement-age tenants, an alternative option would be to buy a bungalow, or other low-maintenance property, with no age restrictions. This will also broaden your target market, in terms of tenants, and make your property more appealing.

What’s the alternative to a retirement property?

If you’re not sure whether an age-restricted retirement property is right for you, an alternative may be to search for a property on the open market that you feel will meet your needs as you get older. This might be a bungalow, or just a smaller, lower-maintenance home.

Things to consider if you’re considering buying a retirement property:

• Most retirement properties will be leasehold. This means there may be restrictions on how you use the property. Make sure you read the small print carefully to ensure you know what you’re committing to.
• Retirement properties can be difficult to re-sell. There is a smaller pool of potential buyers and therefore properties are likely to take longer to sell and achieve a lower price than a similar property without any restrictions.
• Are there additional service charges? If so, what do they cover? Will these increase over time? What does the contract say about cost increases? Be clear about what you’ll be expected to pay – now and in the future – on top of the cost of buying the property.
• Choose the location carefully. Where do you want to live? What local amenities are within easy reach? Which friends and family members will be close by?

There are many things to consider when thinking about purchasing a retirement property. It’s difficult to anticipate your future needs, but it’s important to think seriously about what retirement may look like and what type of property will suit you best.

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• What are title deeds?
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• Can I sell my house with an ongoing neighbour dispute?
• My house is not selling – what can I do?