When you think about retirement housing, the picture is usually pretty appealing.
A lovely modern apartment. No more worrying about the garden. A communal lounge where you can have a coffee and a chat. Maybe a guest suite for the grandchildren, a lift instead of stairs and the reassurance that help is there if you need it.
It sounds like the perfect next chapter.
But there is one question we think is worth asking a little earlier in the process:
What happens to the value of that property when you come to sell it?
And it is a question that doesn’t always get the attention it deserves.
The price tag can be surprisingly high
There are some impressive new retirement developments being built in and around Exeter, offering beautifully finished apartments and a whole range of facilities.
But some of the prices are eye-opening.
At the time of writing, new retirement apartments in Exeter are being marketed at prices ranging from around £270,000 for a one-bedroom apartment to £400,000 or more for two-bedroom properties, depending on the apartment, specification and development.
And to be clear, these aren’t necessarily just four walls and a kitchen.
You are paying for the lifestyle, the communal facilities, the management, the convenience and, for many people, the peace of mind.
For someone downsizing from a larger family home, that can absolutely make sense.
But there is a difference between paying for a lifestyle and buying an asset that is likely to increase in value.
That is where things get interesting.
The resale market tells a different story
Take a look at some of the older retirement properties currently available on the resale market and the difference can be quite stark.
There are retirement apartments available at considerably lower prices than you might expect when compared with some brand-new developments.
Of course, every property is different. Location, size, condition, lease length, service charges and the particular development all make a difference.
But it does raise a question:
If you buy a brand-new retirement apartment for several hundred thousand pounds, what will it actually be worth when you want to move on?
That isn’t something anyone should ignore.
It’s not just the property itself
One of the reasons retirement properties can behave differently from conventional homes is the cost of running them.
Service charges can be considerably higher than those associated with a standard leasehold flat because they can cover things such as communal areas, gardens, lifts, staff, maintenance and other facilities.
There can also be restrictions within the lease and, depending on the development, fees associated with selling the property.
These are all costs worth understanding before you fall in love with the lovely communal lounge and book the afternoon tea.
We’ve seen the other side of it
This isn’t something we’re raising just because it makes an interesting blog topic.
We are currently listing 29 Meyer Court for £27,500. The property was last sold in 2008 for £205,950.
That’s a significant difference in value over the years, and while one property obviously doesn’t tell the whole story, it does highlight an important point: retirement properties don’t necessarily behave in the same way as conventional homes when it comes to resale value.
There are many reasons why a retirement property may sell for less than its original purchase price, including the age and condition of the development, service charges, lease terms, demand and the changing needs of buyers.
It doesn’t mean that retirement housing is the wrong choice. For many people, the lifestyle, convenience and peace of mind can be far more important than making a financial return.
But if you’re considering buying one, it’s worth looking beyond the purchase price and asking what the property could realistically be worth when you’re ready to move on.
Retirement housing isn’t necessarily an investment
For many people, the reason for buying a retirement property isn’t to make money.
It’s to make life easier.
It might mean leaving a large family home that has become too much to maintain. It might mean having neighbours nearby rather than living alone. It might mean having access to communal facilities and someone on hand if something goes wrong.
Those things have a value.
But that value isn’t necessarily reflected in the resale price.
If you are considering buying a retirement property, we’d suggest looking beyond the shiny new kitchen and beautifully dressed show apartment and asking some slightly less glamorous questions too:
What are the annual service charges?
How have they changed over the years?
Are there any exit fees?
What restrictions are in the lease?
What have similar properties in the development actually sold for?
And, importantly, how easy have they been to resell?
Because the best property decision isn’t always about finding the cheapest house or the biggest house.
It’s about understanding exactly what you’re buying.
And sometimes, the numbers tell a rather different story to the brochure.
