Renting in retirement can avoid high service charges which are putting people off downsizing

This week a new research report from law firm Winckworth Sherwood and Housing LIN, asserted that housing for older people is being ignored by the government. It also highlighted the lack of choice of housing and the fact many older buyers are confused about the retirement housing options available.

 

80% of those surveyed claimed that the Government’s focus on housing is unfairly skewed towards first time buyers. And while location, availability and affordability are key drivers for people to move into retirement housing, uncertainty over high service charges is preventing them making the decision to move.

As Jeremy Porteus, Managing Director at Housing LIN pointed out, “People aged over 65 are involved in some 40% of all housing moves. The Government and our industry need a long-term strategy that addresses the expectations and the care and support needs of all involved that reflects the scale of this market and to introduce measures that give older people confidence about the decisions they must take.”

While (high) service changes may be a concern for people looking to buy a retirement apartment, those that rent instead don’t need to worry about them. Renting a purpose built retirement property on an assured tenancy means there are no additional service charges or ground rent to pay, as these are paid by the leaseholder.

 

We are seeing growing numbers of older people choosing to rent, many downsizing from a larger home and releasing capital to help fund retirement. One of the key drivers for those choosing to rent is the assured tenancy, as people know they can rent for life if they choose and that rents will only increase annually in line with the Retail Price Index.

 

This makes budgeting much easier as they don’t get any unexpected surprises, or have to deal with ongoing property maintenance, which can become a burden for homeowners as they get older.

While many over 65s will be looking to buy a property when they downsize, increasing numbers are realising the benefits of renting a retirement home. We have seen a steady growth in enquiries since 2002, with 2015 and 2016 showing the highest enquiry levels yet.

 

Downsizing and renting can be the ideal lifestyle choice for older people, as well as being a good financial decision. Moving to a new location and enjoying a fresh start is an exciting prospect for many as they start a new stage in life. The social side of living in a retirement community, as well as the access to services they may need as they get older is a big attraction for many people.

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