Buying a retirement property

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.

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.

Walk away 😱

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.

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.

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.

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.

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.

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.