The real costs of a retirement village revealed

If you're reaching retirement age, you might have thought about planning for your future, including where you'll spend your retirement. If you're considering a retirement village, the prospect of downsizing might feel as though you're about to give something up, but retirement living in a community of like-minded people can add a great deal of value to your life. With value in mind, this blog has been written to give you impartial information about the real costs of retirement villages. 

You're welcome to call our free advice line on 01892 335 330 for any help finding or funding retirement living communities. 

Retirement villages offer independent living 

For many, retirement homes and villages represent the ideal way of staying independent for as long as possible. With purpose-built homes, a team of staff available to you 24/7, and high-quality facilities on your doorstep, you generally have everything you need to help you maintain an active and healthy lifestyle.

A study by ARCO (Associated Retirement Community Operators) suggests that living in retirement communities benefits both mental and physical health as a whole, reducing the likelihood of spending time in hospital and the need to enter residential care homes in the future.

Financial benefits also play a part in helping people decide to move into retirement properties - downsizing frees up capital and reduces the costs involved in the upkeep of a larger family home.

Most retirement property purchases though are made on a leasehold basis, and leasehold properties tend to involve other costs.

So, what are the real costs of a retirement village? What else do you need to weigh up before making the move?

Watch the short video below or continue reading this guide on the true costs of living in a retirement village.

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Average retirement living property prices in 2024

Just like the regular property market, how much you will be spending on a retirement home will depend largely on where in the country it is. But because you are getting access to premium facilities as well as the home, prices for a one or two-bed property in a retirement village will generally be higher than they might be for conventional properties.

Retirement apartments for sale in London

In London, for example, you should expect to pay upwards of £350k for a one-bed apartment in a retirement community, rising towards the £5 million mark for high end developments. 

Are retirement living villages cheaper elsewhere in the UK?

Outside the metropolis however, in the West Midlands for example, starting prices for a new-build retirement property generally hover between £150k and £300k. 

The price of a retirement village varies massively throughout the UK, depending on:

• Location 
• Property type
• Number of bedrooms
• Access to green space or balcony
• Services on offer
• Cost of service fees
• Cost of management fees

Retirement living resales 

There's a growing resales market in retirement housing now, including these McCarthy Stone apartments that can provide excellent value for money. Whether you're looking for a bungalow or a private apartment, a previously-loved home could have a lower property value, potentially leaving you with more money to spend on enjoying your retirement. 

Management fees in a retirement village

Once you’ve found a retirement property you like, at a price you feel you can afford, it’s time to look at the monthly management fee associated with it. This is the fee you will be asked to pay to cover the services and facilities that the retirement village offers. This will usually include things such as staff costs, maintenance of the external buildings and gardens, and any security features of the development.

Management fees are comfortably the largest outgoing beyond the purchase price of the retirement property. They can range anywhere between £300 and £700 per month, but can go higher than £1000 per month in high-end developments.

If you opted to rent your retirement home instead of purchasing it outright, then the rental price will usually include management fees.

Every retirement village will have a different list of what is and isn’t included in the management/service fee, so it’s worth digging to find out exactly what it covers. Autumna provides a list on profiles where information is available, an example of which is shown below:

Ground rent

In England and Wales, from 30 June 2022, ground rents on newly created leases in England and Wales were reduced to zero. Since 1 April 2023, this rule has applied to newly created leases in retirement housing too, regardless of whether the scheme charges ‘transfer’ fees.

However, if you're buying an older retirement living property, you may still be charged ground rent at the typical price of around £350-£400 per year.

Depending on the terms and conditions of your lease, you could be asked to pay this weekly, monthly or annually.

Deferred Management Fee (DMF)

It’s not uncommon for retirement villages to charge what is otherwise known as an ‘exit fee’ if you decide to sell your property at any point.

Deferred Management Fees (DMFs) can represent a significant portion of your final selling price. They are there to help to reduce the day-to-day costs of living in your property by deferring a percentage of what would otherwise be covered in the monthly service fee, until you leave. The fee is calculated as a percentage of the value of the property and can be as high as 15% to begin with. This percentage might increase or decrease based on how many years you have lived there.

Not every village includes this charge, but given the financial implications, it’s important to be clear what it might be before you go ahead with any purchase.

Utility bills

Just like when purchasing a normal property, you may still have to take into account utility bills. These can include broadband, TV licenses, council tax, heating and electricity, all of which are less likely to be covered in the management fees.

If you need to find the retirement communities that do include utility bills in their management fees then use the ‘Additional Filters’ button in your Autumna search and then head for the ‘Service Charge Includes’ tick boxes.

Care costs

Some retirement villages have care homes located on site. Other retirement villages will have links with care homes and/or domiciliary care services, so you have support if your health deteriorates. But while emergency 24/7 call-out services will usually be covered in the management fee, extra care packages will usually come at further cost.

Separate packages will usually be available for personal care services, domestic help and maintenance, so it’s worth taking the time to find out what is offered before you make a decision, even if you are in good health at the time.

Again, press the ‘Additonal Filters’ button on Autumna and tick the boxes to find retirement communities that include personal care in the management fee.

Try before you buy

Choosing to live in a retirement village is a big commitment. It’s worth noting then that many operators such as Retirement Villages, Enterprise Retirement Living, Richmond Villages and McCarthy Stone give you the option to try before you buy.

This will usually involve a one or two-night stay. You will have all the facilities of the community available to you, and it will naturally allow you to meet potential neighbours and ask both them and members of staff any questions you may have.

How much is a retirement village near me?

Autumna is the most comprehensive directory of retirement villages in the UK with prices to suit every budget. It is a great starting place to find the right retirement home in the right retirement community for you.

You can browse the listings yourself, or you can request a free shortlist of retirement developments that match what you are looking for from our team of experts.

If you would prefer to speak someone about your needs, call our advice line on 01892 335 330. It is open seven days a week. (8:30am – 5:30pm Mon-Fri, 10am – 5pm Sat, 10am – 4pm Sun).

Alternatively, feel free to email us via info@autumna.co.uk.