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Purchasing a Retirement Property

View profile for Laura Allright
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As we continue to live longer many people consider downsizing as their family homes no longer fit their needs.  For example the family home is too big to maintain, or it does not suit their physical needs.  When looking to downsize many now consider buying a retirement property. 

Retirement properties usually have a minimum age of 55 or 60 for those living at the property, although they can often be owned by anyone of any age.

A retirement property comes with numerous benefits such as living in a community of similar age and like-minded people but still owning your own home and retaining your independence whilst having on site support, e.g. a site warden or having an emergency alarm.

Retirement Village Leasehold GloucestershireThe majority of retirement properties are leasehold.  Often purchasing a retirement property will be the first time a person has owned a leasehold property and therefore they need to be aware of what this entails. In general the landlord retains a certain degree of control over the property and is also responsible for maintenance and repair of the building as a whole, but not the inside of the individual apartments.

Ideally the term (length) of the lease should be a term of 999 years, however some leases are for 99 or 125 years.  A lease for less than 999 years is not an issue but as the unexpired lease term gets closer to 80 years it will need to be extended which will incur legal costs to the property owner and possibly the payment of a new lease premium to the Landlord / Freeholder.  Therefore, when purchasing a leasehold property, it is important to know how long the lease is, when the term will expire and consider potential future costs. 

Under the terms of the lease the landlord or management company will be required to provide certain services.  Services include, but are not limited to, maintaining, and repairing the building, insuring the building, upkeep of communal areas, providing a site warden, maintaining, and repairing emergency alarms.  As these services benefit all the property owners, each property is required to contribute to these costs by way of a ‘service charge’ or ‘management charge’.  The level of service charge and amount each property has to contribute is set out in the lease. 

Depending on what services are being provided by the landlord or management company will depend on the amount of service charge payable, i.e. if there is a gym and swimming pool onsite service charge levels will be higher. It is important to consider the affordability of the service charge costs for the whole length of time you envisage being at the property. 

Another cost that may be due under the terms of the lease is ground rent.  Ground rent is payable to the landlord.  Since the implementation of the Leasehold Reform (Ground Rent) Act 2022, any newly granted lease (i.e. a brand-new property at the start of its lease term) must have a zero ground rent.  However, if you are buying a leasehold property for which the term has already started you may have to pay ground rent, the amount of which will likely increase over time.  You need to ensure that you have been advised by your conveyancer how the ground rent will increase over time to ensure that the cost will be affordable.

Many retirement property leases require the outgoing owner to pay the landlord a fee on a sale, this is known as an ‘exit fee’, or ‘transfer fee’, or ‘departure fee’. 

This fee can also be due under other circumstances, for example if the property changes ownership under the terms of a Will. Your conveyancer will advise you of this fee and under what circumstances it becomes due.


At Hughes Paddison our residential property team are highly experienced in the purchase and sale of retirement properties.  If you would like to discuss any of the above, or buying or selling a retirement property in general, then please get in contact with us.

The information contained on this page has been prepared for the purpose of this blog/article only. The content should not be regarded at any time as a substitute for taking legal advice.