Finding the right retirement property
When it comes to choosing a new home, it pays to plan ahead, and this is arguably even more important when it comes to retirement.
Whilst the Chancellor’s Spring Budget on 15 March increased the annual tax free allowance for adding to your pension pot from £40,000 to £60,000 as of 6 April 2023, any bricks and mortar investment that you make is equally as important as your liquid assets.
For many retirees, the idea of downsizing appeals since it means you are not only likely to free up capital from your existing home, but if you need a mortgage for your next property this is likely to be considerably cheaper on a smaller house. The costs of running and maintaining said house when it comes to utility bills, council tax and the like will also be more affordable and in the current cost of living crisis this is certainly a bonus.
Whether you are looking to downsize in your local area, or retirement brings a relocation to a completely different area of the UK – or even further afield – there are a number of considerations you need to make when it comes to finding the right retirement property.
Location, location, location
If your commute to work no longer dictates where you live, you want to move closer to family or friends, or you just fancy a complete change of pace, then your property search may take you to a different area of the UK entirely.
According to the Office for National Statistics, the most popular places to retire to in the UK were as follows in 2022.
Dorset
Shropshire
Wiltshire
Cornwall
Northumberland
East Suffolk
Tendring, Essex
Cheshire East
East Devon
East Riding of Yorkshire
Whilst the south coast is perennially popular with retirees, it often has the price tag to match its popularity, so consider areas like Northumberland, Yorkshire or Cheshire where your money will go further, and the hordes of tourists are likely to be more manageable come the summer months!
Speak to local estate agents in your chosen area and do your own research on property prices there to make sure you could realistically afford to buy the type of property you are looking for in the area(s) you like.
Amenities
If your dream move takes you away from an urban area to a more rural setting, really consider the amenities you take for granted now such as good transport links, shops, eateries and essential services. If you would rather leave the car at home, a good local bus service and/or a local train station are a must. A home that is walking distance from a post office and convenience shop for essentials like milk and bread is also going to be useful.
If you are moving to a completely new town or village then social hubs like sports clubs, village halls, libraries and a local pub make it that bit easier to integrate with the community and meet like-minded folk with similar interests. If you have any particular hobbies you want to devote more time to, then it is worth checking out whether you will have easy access to these hobbies in your new area. A fan of golf? Is there a club nearby that you can join? Love to swim or flex those muscles in a spin class or yoga? Then a decent gym or leisure centre on the doorstep is essential.
Future-proofing your purchase
No one knows what the future holds. But if you are buying a new home then you want to make sure you have the best chance of living in it for as long as possible. Whilst thoughts of residential and nursing homes may be a long way off for now, making sure you have easy access to medical care and a pharmacy, GP and hospital within easy reach is a sensible move.
If you really fall in love with a particular property, also think about any features that may become a problem later such as lots of stairs, a steep drive or a lack of pavements or accessible paths to and from the property. Flexibility is key too, and if you have the option of plenty of downstairs living space, or the possibility of creating it, this is always useful. If your home is likely to need some alterations in the years to come but ticks all of the other boxes, make sure you have set aside the necessary savings for future renovations.
If you are moving from a house to a flat, particularly a flat in a complex designed specifically with the over 55s in mind, you also need to be aware of any on-going service charges or ground rent fees and factor these into your outgoings. Most flats are sold on a leasehold basis, which means your ownership only lasts for a fixed term. The lease may also stipulate how you use the property and the type of improvements you can make to it. Most leases run for a term of 125 years but always check how long is left on the lease before you purchase it. A shorter lease of 80 years or less can make a property difficult to resell and extending a lease can be costly.
Whatever property you choose, moving house is an expensive business – costing around £10,000 on average each time – so take your time weighing up the best options for you as you don’t want to dip into that pension pot any more than you have to!
Can you release some capital from your existing property?
When it comes to purchasing a new home in retirement, you need to make sure that you have an accurate idea of the current value of your existing home too. This will give you an idea of how much money you will have to spend on your next home and allow you to work out the kind of savings you could add to the retirement pot as a result of downsizing. Start with an online valuation from companies such as Yopa and then consider arranging a no obligation, in person valuation from a number of local estate agents who know the market in your area well.
It is important to consider how you sell your home as well. If you have the time and inclination to do so, becoming more involved in the process by arranging and hosting viewings and/or negotiating directly with prospective buyers can save you a considerable sum on estate agent fees. Many online estate agents offer these kind of flexible options when it comes to selling. The Home Owners Alliance provides a useful comparison of a range of online estate agents.
