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Why Are Retirement Flats Not Selling?

Property Saviour » Buying » Why Are Retirement Flats Not Selling?

Retirement flats were unpopular during the pandemic as people were not keen on relocating. Elderly people were especially anxious about the virus due to their age and medical issues, which made potential buyers wary of buying retirement flats.

This blog explores why retirement flats haven’t been selling well in the post-pandemic market. Several factors can make it difficult to sell a flat:

Table of Contents

Selling a leasehold retirement flat

The majority of retirement properties are leasehold. New builds usually come with 999-year leases, while older flats may have been purchased with a shorter lease of between 125 and 99 years, which will have been gradually decreasing as the owner lived there.

Properties with less than 70 years left on the lease can be difficult to sell and extending the lease can be expensive. 

Leasehold issues are one of the biggest turn-offs for buyers of retirement flats. Before purchasing a flat, make sure to check the lease. If the lease is relatively short, be aware of the cost of extending it, and inquire as to whether it can be extended at the time of purchase.

Otherwise, you will have to wait two years before being able to extend it, and the shorter the lease is, the more difficult it is to sell the property.

Event fees

Leaseholds are often accompanied by event fees. This is when the lease contract requires the property owner to pay a fee for particular events such as selling, sub-letting, or transferring ownership of the property.

These fees usually take the form of a percentage of the resale price or market value of the retirement flat. The amount of this fee can vary depending on the length of time you have lived there. Age UK reports that some companies can charge up to 30%.

These fees may also be known as exit fees, transfer fees, or assignment fees, so be sure to watch out for them before you purchase. If your lease contains these fees, it may be the reason why your retirement flat is not selling as fast as you’d like.

Why Are Retirement Flats Not Selling
Properties with less than 70 years left on the lease can be difficult to sell and extending the lease can be expensive. 

Ground rent and retirement flats

Check your ground rent details carefully. Developers often add clauses to leasehold contracts that can cause the fees to skyrocket.

The government has taken steps to reduce ground rents on future leases, but it is important to check for any clauses that could lead to increases in the future.

If you find that your retirement flat has one of these clauses, it could be the reason why it is not selling.

A useful tip when buying is to make sure you understand what is charged initially and whether and how often the ground rent increases, as this could hinder the sale of your retirement flat.

Service charges

Retirement flats are not selling well due to the service charge, which is a substantial expense for the level of services provided. It’s not uncommon for the service charge to reach four figures each year, and this cost is subject to increase.

When it comes to selling a retirement flat, those with high and increasing service charges may not be appealing to buyers.

It is important to fully investigate the service charges before purchasing a retirement flat, as this could affect a future sale.

Requesting to see the financial records of the last few years of service charges is a good way to determine whether these fees are stable or have been increasing. Being informed about the service charges before buying a retirement flat can be beneficial in the long run.

Age restrictions

Selling a flat with restrictions on the age of the purchaser can be a challenge. Many retirement flats have a minimum age for the occupier, which reduces the number of potential buyers.

Unfortunately, there are no laws preventing landlords from applying age restrictions to their properties. This could explain why your flat isn’t selling – there is a smaller pool of people who meet the age requirement.

How to sell a retirement flat quickly
Property Saviour will make you a free cash offer, so you can sell your house quickly and easily, no matter that it's a retirement property.

How to sell a retirement flat quickly?

If you’re in the market for a retirement flat, it’s important to do your research and make sure you know all the facts before committing. You’ll want to be as transparent as possible when it comes to potential buyers when the time comes to sell.

If you own a retirement flat and you’re having difficulty selling it, Property Saviour can help. We understand that time is of the essence when you need to sell, so we offer a ‘sell flat fast’ service.

Property Saviour will make you a free cash offer, so you can sell your house quickly and easily, no matter that it’s a retirement property.

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