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Buying 'Retirement' Property.
Options

connors07
Posts: 123 Forumite

I'll try to keep this short and sweet to the point. My parents amicably are deciding to sell the 'family home' and move to different areas of the country - one to be closer to their family and one to move closer to me so they have someone to care for them as one of parents is close to 80 and is needing more and more support. Both are moving to 'cheaper' areas of the country which helps, the family home will be sold quickly going by the recent history along the road (I appreciate it doesn't mean everything is sorted within 6 months!) and there is no mortgage left - it is fully paid. On Rightmove/Zoopla etc I see 'retirement houses' - some can be purchased as 'non retirement' and the cost is more. I am not looking to cheat the system or anything I would just like to know what would happen if a retirement home is bought using money from the sale which my father and I live in? Is that even allowed? Are there any long term implications? So when he passes away does the house then need to be sold to someone of retirement age? The differences in values is what is confusing me. I am a homeowner but in my search years ago I would hide retirement properties.
I feel like it would be better off not going for a 'retirement property' but I don't want to exclude good options. Any info would be much appreciated.
I feel like it would be better off not going for a 'retirement property' but I don't want to exclude good options. Any info would be much appreciated.
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Comments
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I have been looking into this for my mum. Retirement property is a pretty vague term that covers a number of options. Some retirement homes offer care packages which will bump up the cost, facilities can vary hugely. Some schemes offer different price levels dependent on the person's assets. Another option to consider is a 'normal ' property with carers coming in to help out.
Resale will depend on the individual development but most will require that the property is sold to another person of retirement age. Some offer buy back schemes where you get back the amount you paid and the retirement home then sells it on . This is not common. A long term issue is what happens if your dad needs to go into as his retirement property will need to be dold to pay the care home fees. Retirement homes can be hard to sell, at the moment there is oversupply.
I think you need to work out what facilities you want first before looking. Organisations such as Age Concern are worth contacting for advice on the different types of retirement homes available.
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Specifically retirement properties will appear cheaper because of the restricted market and typically high ongoing costs (wardens, alarm systems, lifts, communal lounges etc).
The age restrictions won't apply to the source of funds but to the ownership and/or residency.2 -
You would need to read the specific restrictions, and facilities, of any particular property you were interested in. They will vary.Hopefully the estate agents blurb will give an overview, and hopefully it will be accurate (!!?), but as with any property you are serious about pursuing, for the sake of £3 it is always worth downloading the Title from the Land Registry at an early stage.0
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connors07 said:On Rightmove/Zoopla etc I see 'retirement houses' - some can be purchased as 'non retirement' and the cost is more.
Do you mean this sort of thing... the same house below is advertised as a 'standard property' for £450k, and as a 'retirement property' for £297.5k- Standard property for £450k: https://www.rightmove.co.uk/properties/87216712#/
- Retirement property for £297.5k: https://www.rightmove.co.uk/properties/87216718#/
In simple terms, the difference is that for £450k you're buying a freehold property - which would usually increase in value. So when your father dies, goes into care, decides to move etc, it can be sold like any other house - hopefully at a profit.
But for £297.5k your father would get a 'lifetime lease'. So when your father dies, the lease ends - and you no longer own the house, and you get no money for it.
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davidmcn said:Specifically retirement properties will appear cheaper because of the restricted market and typically high ongoing costs (wardens, alarm systems, lifts, communal lounges etc).
The age restrictions won't apply to the source of funds but to the ownership and/or residency.0 -
andybanjobrown said:davidmcn said:Specifically retirement properties will appear cheaper because of the restricted market and typically high ongoing costs (wardens, alarm systems, lifts, communal lounges etc).
The age restrictions won't apply to the source of funds but to the ownership and/or residency.
Basically, her gifting you the entire purchase price in return for occupation...?
That's just got deprivation of assets scribbled all over it in flouro marker pen.1 -
andybanjobrown said:davidmcn said:Specifically retirement properties will appear cheaper because of the restricted market and typically high ongoing costs (wardens, alarm systems, lifts, communal lounges etc).
The age restrictions won't apply to the source of funds but to the ownership and/or residency.0 -
davidmcn said:andybanjobrown said:davidmcn said:Specifically retirement properties will appear cheaper because of the restricted market and typically high ongoing costs (wardens, alarm systems, lifts, communal lounges etc).
The age restrictions won't apply to the source of funds but to the ownership and/or residency.0 -
andybanjobrown said:In this case, she believes it'll make it easier/quicker for me to dispose of the property upon her deathIt won't.The complicated and time-consuming part of selling a retirement property has nothing to do with the ownership, rather to do with the fact that it's a retirement property which are notoriously difficult and expensive to sell.
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There is an over supply of retirement homes in many areas. The price for a new one is vastly more than an older one so I would never buy new. My mum bought her 2 bed one for £249,000 and sold 3 years later for £185,000. And it took 18 months to sell. The one bed new ones sold for £190,000 and now struggle to sell for £100,000! (8 for sale this week)
Also be aware of the selling fees. I can't remember exactly the wording but something like - Transfer of lease 1%, Transfer of ownership 1%, management pack £455, and paying the service fees, approx £3000 PA and ground rent £500 PA
Mum was happy there and they are a good solution for some people but wait till the price finds the right level for the area
Love living in a village in the country side2
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