In a poignant account shared with The Guardian, an Oxford resident has detailed the challenges she faced while trying to sell her father’s retirement flat, highlighting issues that could be indicative of broader trends in the retirement housing market in the UK. The flat, situated in the Fleur-de-Lis complex in Abingdon, was purchased for £252,000 eight years ago, but after enduring a lengthy sales process, it has been sold for just £122,000—less than half of its original value.

The author of the account revealed that for most of the six years preceding the sale, they had to pay annual service charges exceeding £4,000. These costs comprised £2,000 in council tax and an additional £2,000 in interest on unpaid care home fees, which the proceeds from the flat’s sale were meant to cover. The struggle to sell retirement apartments is echoed by the observation that, within the same development, a significant proportion of flats—approximately one third—are either unoccupied or being rented out.

The difficulties are compounded by the financial burden of continuous charges. The total amount spent waiting for the flat to sell has surpassed £50,000, a sum now critical for funding necessary nursing home care. Statistics from the government’s Older People’s Housing Taskforce reinforce these personal accounts, indicating that only 0.6% of individuals over the age of 65 in the UK reside in retirement complexes, compared to significantly higher rates in countries like the US and Australia.

Retirement properties are usually sold on a long lease, typically 125 years, but the value of these homes can depreciate over time as the lease shortens. Additional financial encumbrances include substantial service charges and ground rent, which are levied regardless of whether the owner occupies the property. Furthermore, the imposition of age restrictions can limit the pool of potential buyers; in the case of Fleur-de-Lis, the requirement is that residents must be over the age of 65.

In response to the issues raised, Fleur-de-Lis management characterised the individual circumstances described as “unique” and attributed some difficulties to the pandemic’s impact on property viewings. They also noted that, over the last 18 months, their resales team has secured an average resale value of 91% of the original purchase price, a figure they consider adequate given current housing market conditions.

Sebastian O’Kelly from the Leasehold Knowledge Partnership weighed in on the conversation, stating that retirement housing has led to significant wealth erosion for many families. He suggested that prospective buyers consider alternatives, such as shorter tenancies or guaranteed buyback schemes, to avoid similar pitfalls.

As these narratives unfold, potential buyers are advised to thoroughly investigate the associated fees and restrictions outlined in lease agreements and to research resale prices before making commitments to purchase in retirement developments.

Source: Noah Wire Services