30th November 2015 at 2:40pm
An increasingly popular way to enjoy a comfortable retirement these days is to opt to live in a community specially designed for older people – a retirement village.
Around 20,000 retirees in the UK now live in retirement villages, but growing waiting lists to buy a property in these communities shows demand is strengthening.
A village life
Retirement villages are designed for people aged over 55 as an alternative housing and lifestyle option. And in recent years they have become increasingly popular with people who feel they need more security, support or company, but who want to maintain their independence.
Generally designed as larger developments, with 100 or more properties, they aim to offer independent flats or bungalows together with a range of social, sport and leisure facilities and retail outlets, sometimes together with high levels of care and support that can be adapted to residents’ needs.
Currently retirement villages provide homes for 0.5% of the UK over-65 population, but this overall number pales in comparison with the numbers in other countries. In countries such as the US, Australia, South Africa and New Zealand, they account for about 5%.
An active retirement
But have no fear, moving into a retirement village needn’t mean you’ll need to give up a fun-loving or busy lifestyle.
They may be designed for older residents but are by no means quiet, boring places to live. With gyms, restaurants and social clubs on site there’s always plenty to do and fun ways to socialise and keep fit.
Residents can be as active as they like, but they also know they are living in a secure environment, often in the beautiful British countryside. And if, as they grow older, they need help in day to day living, some developments can help them to stay in their own homes by providing carers.
The good life
And it would appear there may be health benefits too. Elderly people living in retirement villages are less likely to experience loneliness and isolation, a study has found.
These retirement communities, where pensioners can live among other people their age and get involved in a range of activities, can have a “major impact in promoting residents’ quality of life,” the International Longevity Centre found. It claims residents have a higher quality of life and feel more in control of things.
The cost of retirement village living
Buying one of the properties is simple, as long as you are the right age – typically over 55, depending on the village – and have the cash to buy outright without a mortgage.
With all, there will be yearly maintenance costs on top – so you need to factor these in. You’ll also only be able to sell the property on to buyers who also fit the age requirements – and if you want to let out, those that allow it will demand age restrictions are complied with. There may also be other costs – such as for parking or using facilities – and these can all mount up.
Also it’s worth watching out for exit fees according to a recent article for BBC news. Apart from buying a property, and paying any regular service charges, residents are obliged to pay what is variously known in the industry as an ‘exit’ or ‘event’ fee.
The exit fee depends on how long a resident has lived in the village, but is typically capped at 10% of the original purchase price. However in some cases it can be as high as 30%, after just three years – so just be wary.
These fees are currently being investigated by the Law Commission as they have been deemed to have caused ‘anger and distress’ in the past, the consultation is open until the 29 January 2016, so the position may change as a result.
Making a move
Generally speaking, buying a retirement property is not a low-cost option: but if you want a brand new home and one where you’ll be in a community of similarly-aged people, perhaps with added extras, it could be a worthwhile choice.
So if you’re thinking joining the village people or researching the village life further, it’s worth checking out the silversurfers article ‘luxury retirement communities in the UK’, where they provide a pick of some of the best luxury retirement communities around the country.
And don’t worry, it may be billed a village life, but the similarities to Midsomer stop there, and a visit from Chief Inspector Barnaby is unlikely.
The information in this blog or any response to comments should not be regarded as financial advice and is based on our understanding in November 2015.