Trying to sell a retirement flat.

Wabsnazsm

I have been attempting to sell a retirement flat that belonged to my Mother before she died. I am having the most awful time trying to get a buyer for it. In fact, it's a minor miracle when we actually get a viewing for the flat. The block in which the flat is based has had a fairly bad reputation for a while. It had a site manager who was notoriously poor at her job and the place was in disrepair, very tatty and drab with very little atmosphere. Along with the fact that many of the residents had died and left empty properties, the place felt lifeless. At great expense to the flat owners, we have had renovations done with new paintwork, carpets and lighting in the communal areas and the corridors. It has been spruced up a treat and we have a new site manager who is a breath of fresh air.

Still, we cannot shift the flat! It is becoming an unsustainable drain on the finances of my Mum's estate and I'm starting to feel more than a little desperate. I have dropped the price of the flat considerably but ground rent and service charges are still quite high. Council Tax runs at a 100% premium for this empty property so....I'm stuck for my next move. How can I convince people that this is a decent purchase? I truly need to get things moving and I don't know what to do about it.

in_my_wellies

I feel for you. My mum bought one of these for £239,000 in 2014. She quickly developed Alzheimer's and I needed to sell in 2017. It was well maintained and occupied but the sale price had dropped to £199.000. Mum lived with me but had ongoing management fees, ground rent, insurance, etc still to pay. 
A sale for £185,000 eventually completed in late January 2020, just before lockdown. By then I would have accepted any offer. 
The elderly couple who bought it never moved in due to lockdown and it sold three years later for £160.000 having been on the market for over a year 

The manager was lovely but she did say she didn't take the job to run a care home, not experienced for that. When sold to people in their 60's all was good but as people get older needs change and 6 of the 44 flats needed carers which meant changing role for the manager

This isn't much help to the OP but might serve as a warning to anyone thinking of buying one

Screenshot from Rightmove Sold Prices: 

Property sale history

Table showing sale history of current property

Date sold	Percentage change from last sold price	Price	Property	Tenure
17 Feb 2023	-14%	£160,000	Flat	Leasehold
28 Jan 2020		£185,000	Flat	Leasehold

Heidiho

I feel your pain OP as I have been through the same process. I think it all comes down to price at the end of the day, plus extending the lease if it’s beginning to run down is also worth considering. When selling our late fathers flat we slashed the selling price and extended the lease in order to try and make it the obvious choice for anyone interested in buying a property in the block (there’s always more than one up for sale at any given time so it was definitely a buyers market). 

The flat is sold now but I’ve continued to keep an eye on sale prices of flats in the same building. One or two anomalies aside, they’ve continued to plummet. At the time of the sale we felt as though we were almost giving the flat away but, with hindsight, the many thousands that we reduced the price by actually turned out to be a good thing. Two years on from when the sale completed, and one of the flats that was up for sale at the same time as we were selling has only just been marked as sold on Rightmove. If memory serves me right, it had originally been marketed about £20k higher than our final asking price. But when it got marked as sold the asking price was £20k less than ours (ie a reduction of £40k). I know each development is different but, in our case, if we hadn’t taken the hit when we did I suspect we’d have been looking at a much bigger one later on.

good luck with your next steps whatever you do.

SarahB16

Wabsnazsm said:

I have been attempting to sell a retirement flat that belonged to my Mother before she died. I am having the most awful time trying to get a buyer for it. In fact, it's a minor miracle when we actually get a viewing for the flat. The block in which the flat is based has had a fairly bad reputation for a while. It had a site manager who was notoriously poor at her job and the place was in disrepair, very tatty and drab with very little atmosphere. Along with the fact that many of the residents had died and left empty properties, the place felt lifeless. At great expense to the flat owners, we have had renovations done with new paintwork, carpets and lighting in the communal areas and the corridors. It has been spruced up a treat and we have a new site manager who is a breath of fresh air.

Still, we cannot shift the flat! It is becoming an unsustainable drain on the finances of my Mum's estate and I'm starting to feel more than a little desperate. I have dropped the price of the flat considerably but ground rent and service charges are still quite high. Council Tax runs at a 100% premium for this empty property so....I'm stuck for my next move. How can I convince people that this is a decent purchase? I truly need to get things moving and I don't know what to do about it.

Retirement flats have got a truly awful reputation as being very difficult to sell and justifiably so.  I know you say the service charges are quite high but you need to be transparent when advertising and let people know what they are and what they cover.  

Now that you have spruced it up could you take some new photos.  Perhaps contact different places and ask if you can advertise in nearby places where older people meet near to the flat (I'm just thinking out loud).  

I'm not really sure what else to suggest because I wouldn't recommend that anybody should buy a retirement flat. 

Good luck and keep us posted when (I'm being positive) it does sell (fingers crossed).  

danco

I think that the suggestion that people shouldn't buy retirement flats is wrong. Rather, one should factor in the likelihood that the flat will depreciate considerably in price.

I am currently living in a block of retirement flats. The comfort and convenience is far higher than it would be anywhere else (including my old flat). But I don't have immediate family to benefit when I die, so even if the flat had to be given away it would have been worthwhile.

Also, bear in mind that there are two models for service charge and selling procedure for retirement flats. One has low service charges but the freeholder takes a large cut of the ultimate selling price (maybe even has some input into determining that price). The other has large service charges but the owner takes the full selling price without any payment to the freeholder.

Herzlos

Can you rent out a retirement flat, assuming the tenant meets the criteria?

Either way, it may be worth contacting the local authority because they are always desperate for accomodation especially if adapted/suitable for the elderly. 
They don't have much money, but may be able to house someone and pay you rent / get rid of the council tax charges. 

Albermarle

danco said:

I think that the suggestion that people shouldn't buy retirement flats is wrong. Rather, one should factor in the likelihood that the flat will depreciate considerably in price.

I am currently living in a block of retirement flats. The comfort and convenience is far higher than it would be anywhere else (including my old flat). But I don't have immediate family to benefit when I die, so even if the flat had to be given away it would have been worthwhile.

Also, bear in mind that there are two models for service charge and selling procedure for retirement flats. One has low service charges but the freeholder takes a large cut of the ultimate selling price (maybe even has some input into determining that price). The other has large service charges but the owner takes the full selling price without any payment to the freeholder.

There are regularly threads on the forum on this subject. Usually the problem is not a resident trying to sell, but an executor trying to sell a retirement flat of a relative who has died, or where the flat has to be sold to pay care home fees.
Sometimes flats remain unsold for well over 12 months even when the price has been dropped 60 or 70%, meaning estates can not be wound up as one consequence, and they have to keep paying out service fees. 

Clearly it varies from block to block and area to area and no doubt some flats will sell more easily. I guess we usually only get the people with the horror stories posting on the forum, so good to hear another perspective. 

in_my_wellies

Some are lovely and idea for elderly living. The couple opposite my mother travelled for at least half the year so it was ideal to lock up and go away. No messy garden to come home to.

The trick is to buy one third or fourth hand when the true value has been set. In 2012 two beds in my mothers block started at £250,000, one bed at £180,000.  The prices now are about £160,000 for 2 bed and £100,000 for one bed. Given a couple more years when the price has plateaued they will be nice places to live. I have to say the high service fees keep her block looking and smelling like new so worth that when she lived there 

Kim_13

It's abhorrent that these flats are not given an exemption from the empty property council tax premium, given it is well known how difficult they are to sell. Their council tax bands are higher than similarly sized accommodation elsewhere too.

Rosa_Damascena

Kim_13 said:

It's abhorrent that these flats are not given an exemption from the empty property council tax premium, given it is well known how difficult they are to sell. Their council tax bands are higher than similarly sized accommodation elsewhere too.

I think the council should get first refusal on the sale. These homes are wonderful for fit and active retirees but nothing but a burden once they are no longer occupied.

Eldi_Dos

Rosa_Damascena said:

Kim_13 said:

It's abhorrent that these flats are not given an exemption from the empty property council tax premium, given it is well known how difficult they are to sell. Their council tax bands are higher than similarly sized accommodation elsewhere too.

I think the council should get first refusal on the sale. These homes are wonderful for fit and active retirees but nothing but a burden once they are no longer occupied.

That sounds good in theory but is it not just privatising profits socialising losses.

I am not sure but thought these complexes where for owner occupation only.