The Telegraph 08 February 2019
According to Savills, some 300,000 homeowners lack the equity to be able to downsize in the current market. The 40 per cent of over-65s who can afford to sell up and still be left with extra cash to supplement their pensions have a wider range of choices; but those with less equity are more likely to remain in their homes unless illness or financial hardship forces them into sheltered housing.
“Traditionally the sector has focused on a pure for-sale model,” says Henry Lumby, head of Savills’ retirement living division. “Now we are seeing an increase in interest to provide shared ownership and rental as an option.
“The rental option is popular in the UK and Europe, but with boomers’ desire to own their own home it has never taken off here. However, as we have seen with the build-to-rent explosion in recent years within the mainstream market, new tenure options could see a growth in size of market and, most importantly, greater choice for consumers.”
Lumby cites Birchgrove, the retirement developer backed by Bridges Fund Management, as an example of a new private rental scheme for older buyers. Honor Barratt, managing director of Birchgrove, says: “Stepping off the housing ladder in retirement can be liberating – you have no stamp duty or exit fees to worry about and you can try for six weeks before you commit.”
Birchgrove’s first development will be a collection of 74 assisted-living apartments in Sidcup, Kent, due for completion in 2019. Rent includes all utilities, phone line installation, one hour of support each week.
Bridges Fund Management plans to build eight rental retirement schemes within the M25 and is looking at sites in Hammersmith and Fulham, as well as in Windsor in Berkshire, and Chertsey in Surrey.
“We are building quality homes, giving access to people who wouldn’t normally be able to afford them,” Barratt says. “There is a massive under-supply and very few options if you are aged 80 and living in London. There’s no deposit to pay and no commitment beyond giving it a try to see if it feels like home.”
Flexible options for buying a retirement home can have social as well as financial benefits, she adds. “We imagine that there are widowers, for whom the idea of buying a home without their wives for the first time could be intimidating. For their whole lives they have probably been in the role of provider to their dependents. But now in later life, they feel more like a burden to their family.
“We believe that if they can free up some of the equity in their house they can help their children and grandchildren, and get back some of that power that they have been used to.”