I needed to promote my father’s retirement flat at lower than half worth – and that took six years | Property

It has taken me six years to promote my father’s retirement flat for lower than half of what he paid for it. For many of that point we’ve needed to pay annual service prices of greater than £4,000 – £2,000 in council tax, and £2,000 in curiosity on unpaid care residence charges which the sale of the flat was meant to fund.

It appears retirement flats are extremely troublesome to promote. In his specific growth, owned by Pegasus, a 3rd of the flats have been both empty or being sublet.

Two similar flats to my father’s have additionally simply been offered for a lot lower than the unique buy worth. Each time I drive previous a brand new retirement growth I really feel like shouting, “Don’t do it, you gained’t be capable to promote!”

AJ, Oxford

Your father paid £252,000 for his flat within the Fleur-de-Lis advanced in Abingdon eight years in the past and you’ve got needed to promote for £122,000. Whereas ready to attain that paltry sum, you will have racked up service and different prices of greater than £50,000 – cash sorely wanted to pay in your father’s nursing residence charges.

It’s unsurprising that solely 0.6% of over-65s within the UK stay in retirement complexes, in line with figures from the federal government’s Older Individuals’s Housing Taskforce, in contrast with 10 occasions that quantity within the US and Australia.

Properties are offered on a lease, normally 125 years, and the worth can diminish together with the lease size. Service prices will be important, payable whether or not or not the purchaser is in residence; floor lease is commonly levied; substantial charges could kick in when a property is offered or sublet; and the age restrictions restrict the pool of potential consumers. In your father’s advanced, the age vary is restricted to over-65s.

Fleur-de-Lis tells me your ­expertise was “distinctive” and says the pandemic had initially had an impression on viewings. “During the last 18 months, our resales group have achieved a median resale worth of 91% of the unique buy worth, which, given wider housing market situations, is anticipated,” it says.

In response to Sebastian O’Kelly from the marketing campaign group Leasehold Information Partnership, “retirement housing has resulted in huge wealth erosion for hundreds of households”. He suggests folks think about alternate options, similar to some type of shorter tenancy or assured buyback.

I say anybody tempted to purchase into a fancy ought to research the charges and restrictions within the lease, and take a look at what worth resales are fetching earlier than committing.

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