What should I expect?



Surprisingly the costs associated with living in a retirement scheme are likely to be less than those living in other accommodation due to the simple fact that 25 people or so can effectively "buy-in" services cheaper than single users. For example to pay a gardener today for maintaining a quarter acre garden depending on where in the country you are is likely to be of the order of five hundred pounds per annum. But 25 of you could share a gardener for much less. Equally buildings insurance is much cheaper when 25 people get together in the same development.

Eighty per cent of costs are evenly spread in most schemes in the sense that everyone benefits from them in equal proportion to the number of properties on a development irrespective of size of property. It does not really matter if you are in a two bedroom or three bedroom property in a landscaped courtyard scheme. For example on most schemes the day to day staff costs make up about 30% of the total with the alarm system (5%) gardening, (10%) insurance (5%) reserve funds (10%) and management (15%). The remainder is made up of window cleaning, refuse removal, landlord’s costs - such as fire equipment, communal cleaning, furniture, laundry machines and further items including water charges, telephone, postage and other sundry expenses. On most developments the costs which you as the occupier have to allow for are essentially five and these domestic costs are made up as follows: Electricity/Water, internal decoration, contents insurance, telephone/internet and council tax.


What is the Reserve Fund?



The Reserve or Sinking Fund is usually a special account for long-term maintenance such as roof tile replacement or lift renewals and for other significant but not necessarily annual items of expenditure such as lawnmower replacement, furniture renewal.


What’s in the Lease



Are there long leases? Are the service charges reasonable? Ground rents? Exit fees? etc.





Can you sublease the property? Can you rent the property if you go away for six months or so? Are pets allowed? Normally this is a matter of reasonableness - if you have two young red setters probably not. What alterations can you make? Can you put up a satellite dish? Alterations to the external appearance of a development are not normally allowed. Is there room to park a caravan? Are there any parking restrictions?


What is Commonhold?



Commonhold and Leasehold Reform Act 2002 allows owners (leaseholders) the right to take on the management of their developments subject to certain qualifying conditions.





Long leases (99 years+) or freeholds are clearly more valuable than short leases - those that are less than fifty years. Generally once a lease gets to less than sixty years in length the capital value starts to tail off. The open market value of a flat or house, its worth, is the highest price one particular person puts on the property. This of course will reflect the particular circumstances of the buyer and also assumes the buyer is in a position to proceed. In the real world ‘value’ is determined by cash flows but pricing in the housing market is done by comparison and this tends to lead to rising prices in the long term.


Other questions you should ask



Who is able to buy retirement housing? Normally anyone can buy a property provided the occupier is older than a certain age. For example a niece or nephew could buy a property for an aunt who is over fifty-five. On some developments the age restriction may be higher having been imposed by the local authority with the original planning consent. What are the hours of the scheme manager and what sort of cover is there at weekends? Most scheme managers in retirement housing are on duty during the day, and at weekends emergency calls are put through to a central monitoring system. What is the general level of security? How easy is it to gain access to the development or property? Some developments have public access through them so they are not very secure. Others have visiting scheme managers only. All apartment buildings should have telephone entry systems. What is the level of care? Are there communal facilities and other shared facilities such as a guest room and laundry? Can care easily be brought into the development?