The retirement living evolution – a brighter future for retirement communities.
Dominic Stead is property director at My Future Living
The recent Autumn Budget brought some positive news for retirees, with the Chancellor reaffirming the government’s support for the full state pension triple lock. Come April 2024, pensioners will receive an 8.5% increase in their pension – a move that will help with challenging cost-of-living pressures. Since its inception in 2011, the triple lock has proved vital in safeguarding pensioners’ income. This recent announcement will help to reinforce retirees’ financial security and overall well-being amidst the ongoing economic fluctuations.
For those relying solely on the state pension, this increase promises a more comfortable retirement, with the state pension rising from £203.85 per week to £221.20 per week (£11,502.40 per year). This boost in financial stability will also help maintain robustness within the residential retirement market. With an ageing population in the UK, the financial stability and resilience of the sector is vital as it means that retirees have housing options in the future that will suit their needs.
Growing the retirement rental sector
Choosing the right place to live in later life is a major consideration and retirement communities are growing in popularity. With people living longer and healthier lives, these developments attract independent and active retirees who desire a safe and friendly community of people of their own age.
Another notable shift is the move towards renting. The volatility in the housing marketing means that traditional notions about purchasing property are being reassessed and consequently more people in their 60s, 70s and 80s are choosing to sell up and rent. The 2021 census revealed a significant surge in renting households over the past two decades in England and Wales. Estate agency, Hamptons points to the landscape of British homeownership steadily shifting and predicts the number of over 65 rented households to pass 1m by 2033[i].
Older people see the benefits of downsizing as freeing up equity and savings from their home, which gives them more options than ever, including being able to help younger members of the family on to the housing ladder.
The private rental sector is not always the best option for older people, especially since it was reported in July UK rents rise have risen at the fastest pace since records began[ii]. For these reasons, renting in retirement communities will become a popular choice for many, not only as it’s more affordable but because of other benefits too.
Advantages of retirement community living
In our recent customer survey, nearly a quarter of people said their finances had improved since moving into a retirement development. Many have used the capital from the sale of a house to fund their retirement and they benefit from the fact they no longer worry about some of the issues that may arise in the apartment such as the cost of maintaining a home, as these services are included in the rent. Also, rents are usually lower when compared to the private rental sector in the same area.
But there are other benefits too. Retirement developments tend to be centrally located, in desirable places and close to amenities and transport. With communal spaces for residents to get together and enjoy activities and events they can also be very sociable places and many residents organise outings to local attractions, pubs, and restaurants.
Most rental apartments are available with assured ‘lifetime’ tenancies and this security of tenure provides great reassurance for older renters. For additional support, there is a 24-hour emergency alarm system in each apartment and an onsite manager on duty during the day. With these many advantages and the changing perception of renting, retirement communities will only grow in demand in the future. Not only can they give people financial security, but they also match their lifestyle aspirations too. People can live with likeminded people and share social connections, but at the same time have neighbours they can rely on when needed.
How retirement landlords are lending their support
Landlords like us are committed to supporting retirees and ensuring they live in a safe, secure, and affordable environment. We want people to live happy lives in housing that meets their needs as they age.
One way we achieve this is by capping rent increases to 6% maximum annually, which is far more manageable than the 20% increases that we have seen in some areas this year. We also present this information in a clear and transparent figure to people before they move in.
We are also committed to improving energy performance certificates to level ‘C’, well ahead of any legal requirement to do so, which will help people make savings on their energy bills.
Our assured ‘lifetime’ tenancies are also a game changer for those who previously may not have considered renting. These give the same security of tenure as home ownership, but people have all the other benefits that living in a retirement community brings.
We also support maintenance within the apartments. Things go wrong in homes – boilers break, roofs leak and fences fall –which people need to deal with if they own their home. Renting takes away all this hassle and the cost, as it is the landlord’s responsibility to take care of all these things. In addition, rent includes service charges and ground rent, which makes budgeting easy and more straightforward for people, plus we have a welfare officer whose sole responsibility is supporting our tenants.
The Chancellor’s announcement of the state pension increases in 2024 is a milestone in supporting retirees’ financial security and wellbeing. Alongside the government’s commitment, proactive actions by retirement landlords play an instrumental role in creating thriving and secure retirement communities. As the retirement landscape evolves, these efforts pave the way for a better retirement experience and lifestyle for all. We believe this is what everyone deserves in later life.