Buying a retirement property

My mother purchased a retirement flat a few years ago it is a lovely flat with gardens but I would not touch another leasehold flat with a barge pole The management/service company that deals with the property has changed hands several times since she moved in and every time the maintenance charge goes up a ridiculous amount. We are selling the flat at the moment and it is a nightmare it's not solicitors holding things up it's the management company it takes numerous letters, emails and phone calls to get any answers. The company that manages the flat have terrible reviews online and I am sure they are not all the same but I would check it out very carefully.

You could ask the leasors what it would cost to extend the lease.

But, more generally, I am in agreement with Sue22. I would be vey wary of specialised retirement properties. They are the next big housing scandal.

On leashold flats generally, I would say don't buy unless the owners of the flats own the freehold or, in bigger developments, run the management company.

DMiL had one of four flats in a big Victorian house conversion. The developer set up a company 'Wisteria House, Anytown' which owned the freehold and in which each flat owner had a quarter share. The flat owners had ownership of the building and its maintenance.

I, at one point, owned a flat in a big development with the freehold in the hands of a developer, but the management company was owned and run by the flat owners. Again this worked very well because the management company controlled the care and maintenane of the development and controlled charges.

It depends if he wants to leave any money behind after he dies. I would buy if I did not want anyone to inherit. He won’t have any of the problems involved the sale of the property and could live a really comfortable life. Treat it like it is a luxury car. Enjoy all the benefits and expect no resale value.

You could save yourself the hassle by persuading him to leave it to charity.

One word of warning, is that the management fees increase dramatically each year.

A friend of mine bought one. I'm not sure how easy this is but the tenants formed some sort of association and became the management company. The maintenance charges reduced and they seem happy with the outcome. I suppose you have to have people willing to get involved and not everyone will want that.

We lived in a flat for a few years 15 years ago because we had a holiday home and wanted to be able to lock a property in the uk up when we wanted to go to our rental home. That aspect worked well but when we came to sell it being leasehold was a drawback, one prospective purchaser was advised by their solicitor to pull out because the management company was written into the lease, it was a new build so the lease was long. Our DIL was an estate agent and says that solicitors in general dislike conveyancing leasehold properties.

The major problem of our flat was the management company which was based over 100 miles away, the annual charges went a up considerably and I and another owner asked for details and found ridiculous charges for changing light bulbs, clearing guttering. We found we could change the management company if we had the agreement of a percentage of owners (I forget how many) and after a struggle trying to contact absentee owners we managed it and hired a local company whose charges were more reasonable, we could also have managed the development ourselves reducing costs further and I think they have moved towards that now.

In your brother’s situation I think I would look for a small house in a nice area rather than a flat. If definitely wants a flat perhaps renting one would be an option. Another option is to look into sheltered housing in which case it would be rented rather than bought. People we know who are 86 just sold up and moved to a sheltered housing complex, they are very happy there and feel that a weight has been lifted off their shoulders as maintenance of their former house was getting to be too much for them. As they are self funding finding sheltered housing wasn’t a problem for them, I believe there are restrictions on income and/or capital as well as age, it is easy to find out what is available in his local area and what the conditions are.

This subject comes up quite often on GN. The overall advice is always NO! Unless you are a millionaire 🤭😊

Also never buy a caravan on a site…..you will be out of pocket in the end.

Walk away 😱

My parents bought a retirement bungalow and lived in it for 10 years.
When they went into a home I sold it with no problem. The only thing was 10% of the profit went to the management company.
My DD had a leasehold flat in Bow in London and also sold it with no problem. In fact she sold it with sitting tenants and all its furniture which meant it was incredibly easy.

I know friends who have bought flats which were freehold and had any number of problems with repairs etc.

My mum has just bought and moved into a retirement property. It's wonderful, so much better for her than the house she was recently in and she loves it. We (and she) can't be happier.

We, her family, are all well aware of any potential pitfalls and looked into everything with a very fine tooth comb before she bought the property. Yes, the management fees are not cheap but that's to be expected and the overall benefits are well worth it.

To add another dimension, our adult disabled son is moving near us. At present, he is in a housing association flat, which has worked really well for him. We thought it was be a good idea, and we had the funds available, to buy him a property so that he was secure and settled before the inevitable happens (hopefully not for a very long time yet!). At first, we were thinking about flats, but we found that they were all to leasehold. We then thought it might be better to look at small houses instead because they are more likely to be freehold, which is what we did and he is moving in very soon to a two bedroom end of terrace house. However long the lease is on a leasehold property, it is never 100% yours, however much you buy it for, whereas freehold is. Retirement flats are even more of a problem as they are difficult to sell on. I would not touch one with a barge pole. In your brother’s position, I would look for a small bungalow or house.

If you can afford an alternative , don't!

My late mother bought a retirement flat when my father died, it was very much what she wanted, she felt somewhat insecure in their house. I helped her with that, and she was very happy there. The charges were expensive, she did tell me that, when we her children came to sell, the managing agents, Peverell, an absolute shower would impose a charge just for handing over some documents to the solicitor, which they did, it was over a thousand if I remember rightly, money for old rope. Hats off to residents who have taken over the management of such places. The monthly service charges were high, but I could see where that money was spent, an on site house manager, the common parts were immaculate, garden well maintained and if for example, one of the machines weren't working in the in house laundry, it was quickly fixed or replaced, if the lift was out of order, they were on to it straight away. There were also events and activities organised, my mother enjoyed some outings to theatre shows and NT gardens, afternoon teas that sort of thing. All in all it was my mun's money and her prerogative to spend it how she wished, I was glad she lived out the final 8 years of her life in comfort with peace of mind about her security. I think her flat had a normal lease, not a short one. When we came to sell after her death, it took a while, I'm thinking, up to a year maybe, there were quite a few of them on the market, so the competition was fierce. However, we styled it together, she got rid of all her old furniture and we ordered everything new from John Lewis, had it redecorated, re-carpeted ripped out the bathroom and made it a shower room. and made much of subtle lighting with up lighters and side lights. The estate agents told us that's what swung the sale, the presentation, in fact the lady who bought it, asked if we would include the personal effects in the sale which we did. Some of these places look so tired in "an old person sort of way" which of course the residents are, but faded floral chintz and cumbersome oldie people chairs and doily stuff all over the place can be a bit depressing imo. Before we sold it though, me and my other half would decamp there for weekends, it faced the sea, to get away from our then teens to have a nice break with bracing walks along the coast and to eat out in some lovely old pubs close by..

Personally I wouldn't buy anything with a short lease, I think on resale it would be a problem, and yes retirement properties can be a liability given the considerable charges, which many a prospective purchaser may baulk at. Bear in mind that the newer apartments are now coming with more and more amenities, gyms and pools even in top end ones! However, one does have to think of those left behind who will inherit the property and will be looking to sell it but in the interim will still have to fund the monthly charges, so maybe set aside a fund for that.

Thank you all. My brother doesn’t have a wife or children, his only descendant is his niece, my daughter. She already stands to inherit a considerable amount from me and her father (we’re divorced.) It would be nice if she could inherit from her uncle but it’s not essential.
As you point out, the service charges can be very high and go up willy nilly and that’s a concern. I don’t want to be responsible for paying them if he dies before me so would need to make sure he’s set aside enough to cover these.
Non-retirement properties in the area go for around £100k more so that’s another consideration. My brother (who has significant mental health problems) is financially absolutely clueless so I feel I have the responsibility to make sure he makes the right decision.
Lots of food for thought.

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Could your BiL, rent a retirement flat. More and more of these flats seem to be available to rent, I suspect, because more and more people are wary of buying them because of the problems re-selling them.

Lovely that you care so much about your brother, I hope he moves in to a new home where he is very happy.

whoisit

Totally understand your concerns—62 years left on the lease is definitely something to pause over, especially for a retirement flat which can already be tricky to resell. You're right that extending the lease will cost, and the process isn’t always straightforward. I'd lean towards finding one with a longer lease if possible.

I think they might have come to a decision by now. The tyesd is 5 months old

Depends if he was very young as i would steer clear, but if he was over 50 say and it gave him a happy useful life i wouldn't care if he didn't leave a penny, his happiness comes first and no one should feel they have to leave a penny.

Wonder what got decided?

Allsorts I think this is the best way.

My parents sold up and rented a property for the last years of their lives.
They were SO happy there. I just wish they had lived longer to enjoy it even more.

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OK this thread is pretty old but possibly quite timely! I live in the West Midlands and the prices of retirement flats here have been going down - some are plummeting. Not related to lease length but more likely an over-supply and people waking up to the fact that they are horrendously expensive for what you get, along with ridiculous service charges. Best thing is to look at the Sold prices of other flats in the development or nearby to see what the trend is - RightMove will show you that over the last 5-10 years (or since being built).

Reported whoisit

The remarkable thing is argybargy is that despite this these blocks are going up apace.

I was reading the paper yesterday and saw an advert for one of the main retirement flat builders and I was absolutely amazed at how long the list of sites was. There must have been getting on for 100 development listed in the building now, due to start building soon list.