Retirement villages compared
Are retirement villages a good idea? Buying in a retirement village has its appeals: living among people your age, as part of a community, in a new custom built home. We look at what they have to offer, but also go beyond the glossy brochures to reveal some hefty service charges and sky-high fees. Read more in our snapshot of retirement villages in 2024.
Considering buying a retirement property? These properties, often called retirement villages or retirement developments, are built specifically for those aged 55, 60 or 65 and over. Perhaps you are considering downsizing and moving to a retirement development.
In January 2024 we took a snapshot of newly built retirement villages from across England and had a closer look at whether they are a good deal for homebuyers. Our look at retirement villages compared:
- What’s on the market
- How much the properties cost
- The fees you’ll pay
- How this compares to non-retirement properties nearby
In reading this it’s helpful to understand the different types of fees you may be charged. These retirement villages fees can include service charges, exit fees, event fees, deferred fees, sinking fees and contingency fees. It’s a lot, we know – so here is a table with a brief explanation of each. Along side the fees of retirement villages, it is helpful to keep in mind the other costs of buying generally.
| Service charge | If you own a leasehold property, service charges are your contribution to the upkeep of any shared parts of the building or grounds. This may be payable if the property is empty, such as if you’re trying to sell or if you die and your children are trying to find a buyer. And in some cases you cannot sublet the property, which would help recover some of these costs. |
| Exit fee: Also known as transfer fees, event fees or departure fees. | These may be charged when the property is sold or sub-let. But you may also need to pay it if there is a change in who lives there, for example if a relative, new partner or carer moves in. Exit fees can be up to 28% of the market value of the property. |
| Sinking fund, also known as a contingency fund | This is held in trust and used only for the maintenance of that retirement development and cannot be accessed by the freeholder for its own purposes. |
But with retirement villages, there’s much more to consider than just the service charge and exit fees – substantial as they can be. It’s vital to do thorough research yourself. Find out more in our guide Hidden costs of retirement properties and, as many of the properties are leasehold, it’s a good idea to be aware of the questions to ask and to ensure you have a good conveyancing solicitor to assist with the purchase.
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Review of Retirement Villages
1. McCarthy Stone Heathlands, Farnham Common, Buckinghamshire
McCarthy and Stone are one of the biggest names in retirement housing and you’ve no doubt seen one of their retirement villages near you. This development in Farnham Common, Buckinghamshire, features two-bedroom apartments, priced from £399,950 for over 60s. It offers features including a homeowners’ communal lounge, a house manager, a guest suite, balconies and a camera entry system.
How much is the service charge?
For a 2 bedroom apartment the service charge is £119.60 a week (or £6,219.20 a year), reviewed annually. It’s worth noting Council Tax, apartment electricity, TV licence and telephone/broadband are not included in this.
The ‘calculate my own costs’ section on the website shows that this is cheaper than the suggested costs you may pay for a detached 4 bedroom house of £180 a week, or £9,360 a year. But this assumes you currently live in a 4 bedroom house, and that you currently pay £50 a week on internal maintenance, £60 a week on external maintenance and other costs. So be sure to compare the costs with what you actually pay – the calculator is a rough guide.
How much is the exit fee?
McCarthy Stone says it no longer charges a transfer fee, also known as an exit or event fee, on all leases in all retirement properties built after September 2008. But it does charge a 1% sinking/contingency fee which is paid on resale to cover the maintenance. It also charges a ‘small admin fee’ to cover the costs of checking that the incoming occupier meets the terms of the deed of conditions. It asks people to phone the ‘Property Transfer team’ for more information.
Sinking fee example:
So, If you buy a flat for £399,950 and sell it after 5 years for £450,000, you would pay a ‘sinking fee’ of £4,500.
Our verdict: Lovely tranquil location, located on the border of the Burnham Beeches, a National Nature Reserve and a Special Area of Conservation. Property in Farnham Common is expensive so don’t expect to get a bargain by not opting for a retirement village developer property. But there are apartments available in the same price range that also have shared landscaped gardens but have a much cheaper service charge and no fee payable on selling.
2. Churchill Retirement, Mortimer Lodge, Bridgnorth, Shropshire
This development has 50 one and two bedroom apartments in Bridgnorth, Shropshire. Facilities include a lodge manager Monday to Friday and an owners’ lounge. The price range isn’t easily available to see online but it highlights a one bedroom ‘apartment of the month’ for £252,950. At least one owner living in a Churchill apartment must be aged over 60, with the partner being over 55.
How much is the service charge?
It’s not clear from the Churchill Retirement website how much service charge is. It says on the website many owners find the service charges ‘frequently work out less than what they were paying, in comparable costs, on their previous property.’
It says this is ‘backed up’ by research that found downsizing from a 3 bedroom house to a 2 bedroom retirement apartment could save an owner approximately £2,300 per year.’ It gives the source of this information as the ‘Sizing up the Situation’ report (Housing LIN, 2014) and Millstream Service Charge data. Looking at the report, as well as being nearly 10 years old it’s not clear how the £2,300 figure stated was arrived at. Churchill rightly acknowledges that everyone’s household costs differ and adds that ‘your Sales Executive will go through your costs in detail and complete a “Savings Calculator” based on your current property.’
Also, in the Zoopla listing for the apartment it says that service charge is ‘not available’ and that you should contact the agent.
Top tip: Where you are looking to buy in a retirement village it’s important to establish the service charge and how it is likely to increase year on year, early on in your research.
How much is the exit fee?
According to its website, ‘all Churchill apartments are subject to a 1% contingency fee on sale or sublet of the property. Some Churchill apartments are also subject to a further 1% community event fee on sale which goes towards funding of the communal spaces which are a key feature of retirement communities.’
This fee is based on the market value at the time you sell or rent out the property.
Contingency fee example:
So, if you buy an apartment for £252,950 and sell it 5 years later for £280,000, you would pay a contingency fee of £2,800. Note this is also payable if you sublet the property. If your £280,000 apartment is subject to a ‘1% community event fee’, this would cost an additional £2,800.
Our verdict: We couldn’t find any comparable properties in Bridgnorth. However, there are retirement property resales available, for much less, although these may come with additional fees like exit fees and service charge. 3. Inspired Villages, Ledian Gardens, Maidstone, Kent
In this development by Inspired Villages for those aged 65 or above, which is in partnership with Legal & General and NatWest Group Pension Fund, one Bedroom apartments are from £356,000, while two bedroom apartments cost from £614,000.
It definitely scores highly in the facilities stakes: there’s a ‘wellness spa’ and ‘relaxation pool’, an onsite hairdressers and beauty salon, a bistro, a café-bar and room service is available too. The property is set in landscaped gardens and there’s a gym, a library and chauffeured transport can be arranged too.
How much is the service charge?
These facilities come at a cost – but how much? When you click through to one of the available properties on the Inspired Villages website, it states the price, adding ‘Leasehold, service charges and event fees apply’. But no further information is on the page or links to how to find this information.
However, when we requested a brochure by email the information was supplied. It states: ‘From January 2023, the service charge will be £8,533 per year (£9,083 for double-occupancy) divided into twelve equal payments.’
Is there an exit fee?
Yes, although it’s called an event fee. There are two options, both of which are significant:
- Option 1: The event fee is a proportion of the open market or deemed re-sale value: 6% for resales in year 1, 9% in year 2, 12% in year 3, 15% in year 4 and 18% from the fifth year. This is payable when the property is sold or there is a deemed sale
- Option 2: A percentage of the purchase price of the property set by the landlord prior to the completion of the purchase. This is currently set at 15%. This is payable to the landlord on or before completion.
Note that subletting the property is not permitted.
Event fee example
- If you choose option 1 and buy the £356,000 apartment and sell it in 5 years’ time for £400,000, you would pay an 18% event fee of £72,000.
- If you choose option 2 and pay the event fee before you move in, this would be 15% of £356,000, so you would pay an event fee of £53,400. This would essentially increase the purchase cost to £409,400.
Our verdict: With the facilities on offer we would expect this to be a very pleasant place to live. But it comes at a big cost. However, if you’re looking at non-retirement properties in Maidstone you’ll find apartments on the market that cost significantly less.
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3. Audley Retirement Villages, Scarcroft Park, Leeds, Yorkshire
Set within 110 acres of beautiful land, close to Leeds, the Audley retirement village of 172 luxury properties will be built in and around the restored Grade II listed building, with one bedroom apartments from £475,000 and two bedroom apartments from £510,000, with a private gym, swimming pool, library and restaurant, for those aged 60 or over.
The properties including cottages are being sold as leasehold properties with a 250 year lease and under the terms of the lease, properties cannot be sublet. New build leasehold houses are now fairly uncommon and under proposals in the Leasehold Reform Bill, the sale of leasehold houses is set to be banned – although there are some rare exceptions so perhaps this is one. See our guide for the latest updates on Leasehold Reform.
How much is the service charge?
There are three options for the monthly management fee:
- Option 1: A monthly fee of £963.90 for the year ending 01 March 2024 and deferred management charge of 2% per year.
- Option 2: A monthly fee of £737.10 for the year ending 01 March 2024 and deferred management charge of 3% per year.
- Option 3: A monthly fee of £510.30 for the year ending 01 March 2024 and deferred management charge of 4% per year.
Also, parking costs £600 per year.
Is there an exit fee?
Audley Retirement Villages says a deferred management charge is payable from the sale of your home up to a maximum amount of 28% ‘of the final achieved sales price or open market value, whichever is greater, per year or part-year of occupation’.
Exit fee example:
If you buy the £610,000 cottage and sell it in 5 years’ time for £685,000, you would pay a 10% event fee of £68,500 with option 1, a 15% event fee with option 2 of £102,750. While with option 3 you’d pay a 20% event fee of £137,000.
Plus, Audley Retirement Villages also lists the following as ‘Costs Upon Leaving’: a sales admin fee of 1% of the final achieved sales price or open market value (VAT applicable), whichever is greater. And an additional 2% ‘sales agency fee’ if Audley are the marketing agent (VAT applicable). On a £685,000 property, a sales admin fee of 1% plus VAT is £8,220. While a 2% + VAT sales agency fee would be an additional £16,440.
Our verdict: It looks like a beautiful development with great facilities but it comes at a cost – especially the ‘event fee’. When we took this snapshot there were no comparable properties in the immediate vicinity but by looking a few miles away, you can find much cheaper non-retirement properties that might not have the facilities but don’t come with the additional fees.
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4. Riverstone Kensington, London
Riverstone Living’s luxury development in Kensington, West London offers apartments for the over 65s from £787,000 for a one bed, from £1,150,000 for a 2 bed, and from £2,231,000 for a three bed. Facilities include a restaurant, a bar, library, exercise studio, private cinema and indoor swimming pool. Plus, there’s a 24-hour Concierge and Security. You’re not allowed to sublet or rent out the property.
Retirement villages compared: How much is the service charge?
There’s a monthly membership fee of £1,388 for 1 beds (£16,656 per year), £1,544 for 2 beds (£18,528 per year) and £1,777 for 3 beds £21,324 per year).
Car parking space costs £3,750 per year.
Is there an exit fee?
It charges a ‘Deferred Fee’ as a percentage of the sale price when the property is sold. It calculates this by accruing a 4% charge for each year you own the property, up to a maximum of 28%.
You’ll also need to pay an administration fee of £550+ VAT when you sell the property; this isn’t charged if you appoint Riverstone as sales agent when you sell.
And note: there is also a restriction on selling that states that all apartment sales ‘have to be at open market value’.
Deferred fee example
If you buy a £787,000 apartment and sell it in 5 years’ time for £885,000, you would pay a 20% deferred fee of £177,000.
Our verdict: This is an extremely stylish development with a wow factor offering top notch facilities – but again, they come at a high price. There are new build apartments available close by for less – they don’t have the same facilities but they don’t have the same costs.
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