Property choices in retirement
When deciding where you will live in retirement, the choices are very wide and can be bewildering. The relatively new and specialist retirement housing sector continues to expand, meaning that there are more options available that ever before.
Over several decades, Cripps Pemberton Greenish have helped their clients to make decisions about their housing choices, especially when retirement beckons – and this article draws some general threads together, which may help you.
If you know and love your current home, you may decide that remaining there during retirement is the best option for you. You might have strong ties to the local community, with friends and family nearby, making relocation an unattractive prospect.
It is important to consider the cost implications of staying put, in a house that may have become too big or inappropriate for your needs. This is especially the case where alterations will be required in the future to ensure it continues to meet your needs.
Maintenance costs for larger properties are another key consideration, as well as the physical demands of keeping your home in repair.
Surplus and helpful capital wealth may be ‘locked up’ in the bricks and mortar of your home. The current slow down in the housing market, however, means that you may have to sell your home for less than anticipated. Determining the right time to sell is another important factor in the decision to stay put.
For some, the decision to downsize might be the start of a new adventure in retirement. The chance to explore somewhere new can be exciting and invigorating.
Downsizing provides an excellent opportunity to unlock the capital wealth tied up in your current home. You might choose to use the surplus capital to supplement your pension income, or to make gifts to family members.
You may be concerned that downsizing is something of a leap of faith, especially if the location is completely new. After spending many years in a home you’ve grown accustomed to, it might be hard to decide if the new property is right for you.
While moving to a smaller, more manageable property is almost certain to benefit you in the long term, the move itself is likely to be both tiring and expensive. This makes it all the more important to choose the right property at the right time.
Sharing with family (or friends)
For the younger members of ‘generation rent’ the concept of sharing occupation is well established and accepted.
In retirement, choosing to share a home with family or friends might be a refreshing alternative to living among strangers in a more traditional setting. This might be seen as a lifestyle change for positive reasons, rather than out of necessity, and an opportunity to share companionship in retirement.
Such an arrangement requires careful consideration of a number of questions, including how the property will be owned, how the agreement will be documented and what happens if things don’t work out.
Addressing these questions in a legal agreement provides you with some certainty, but may require some difficult discussions with those you plan to live with.
Retirement developments, and villages
If you are seeking companionship in retirement with a community of like-minded people, these developments might offer the perfect solution. Unlike a care home, you would continue to have your own space in the form of a self-contained apartment. You would be free to decorate the property as you see fit and visitors would be free to come and stay at any time.
The purpose-built developments vary in size, style, location and budget, suiting a range of means and needs. The developments are designed to build communities of like minded owner/occupiers, often with on-site leisure and community facilities.
Essentially, these developments offer all the benefits of independent living but with the safety net of care and support services where required.
The cost of providing communal facilities and management is passed on to the residents, however. These service charges often go up, but they never go down. You should therefore carefully consider your financial situation before making a decision.
Age restrictions on ownership may make it difficult to sell your property when it is time to move on. The market for these developments is newly emerging and fragile.
Sheltered housing / warden care properties
If your current care needs make living independently challenging, these properties provide 24 hour emergency support, with wardens, and medical staff live on site or nearby.
These developments are similar to retirement villages in their provision of on-site facilities, but the service charges are likely to be significantly higher.
You may find it difficult to move on to care homes and nursing homes when the time comes to sell. Once again, the market is restricted due to age requirements and the small pool of potential purchasers.
Care homes and nursing homes
Specialist advice is always necessary when making this decision, to ensure that all your needs are met.
Funding issues often arise here, especially where much of your wealth is locked up in your existing home. The cost of this type of care is much higher, and risks eroding the wealth you might otherwise pass on to the next generations.
Care quality issues have been at the forefront in recent years, causing concern for residents and families alike. This, combined with immature consumer protection rights, means that careful consideration is vital before selecting a home.
How can Cripps Pemberton Greenish help?
As your trusted advisers, you can rely on us to help you make clear-headed and informed decisions, focusing on you and your own needs and wants. We will ask those questions that you may hesitate to ask. We offer unbiased advice, drawn from a wealth of sector experience, and gained through the service of people just like you, facing choices in your retirement, or as you prepare for it.
Our specialist residential property team will help you through the conveyancing process from end to end and, if needed, can help you choose your estate agents, surveyors, independent financial advisers, including advisers who specialise in advice on paying for care and even your removals team.
Our specialist private client team can answer your questions, help you with future wealth and taxation planning, review your Will, and consider Powers of Attorney. They have contacts who can provide independent care advice to help you make the best possible decisions. And they can help resolve problems caused by a property owner lacking the necessary capacity to sign the legal documents needed to sell a property.
If you have any questions on any of the issues raised in this article or would like to discuss your options on retirement with a solicitor, please contact Fiona McIntosh at email@example.com or Stephen Horscroft at firstname.lastname@example.org.