This just in from The Sunday Observor (UK) -- adb
Seniors find safety in numbers as home developers court the 'grey pound'
Gated estates with communal facilities are set to become commonplace - but are they just glorified nursing homes?
The Observer, Sunday June 29, 2008
The number of people aged 65 and over is expected to rise by almost 60 per cent in the next 25 years and the property industry is looking to cash in on the expanded market for retirement housing. Developments based on the American concept of a gated estate exclusively for people over a certain age are going to become increasingly common.
The basic model provides private homes - typically bungalows and apartments - built around communal facilities that may include a swimming pool, bowling green or social club. Such villages often feature an on-site care home along with a team of medical and domestic staff.
Planning law dictates that residents of a retirement community have to be over 55 but, according to Jon Gooding, chief executive of developer Retirement Villages, their average age is around 70. Most of Gooding's customers are still relatively active, but accept that they may have increasing difficulty remaining independent. 'Our residents are looking for greater support as they age and want to feel they are in a safe environment,' he says.
Gooding explains that it isn't just the gated entrances that make residents feel secure; access to medical care, domestic help and a sociable atmosphere are also important attractions. 'One of the key problems for the elderly is isolation,' he says. 'Retirement villages are usually lively environments, so it works on a social level as well.'
It was that community element which persuaded David Cawley and his wife Susan to buy into the company's Castle Village development in Berkhamsted, Hertfordshire, five years ago. Mr Cawley, now 72, says that continuing to live in their isolated Devon hamlet would not really have been an option as they grew older. 'We were principally attracted by the congeniality of the neighbourhood,' he says. 'We have a bright social life and it's like living in any other village.'
Mr Cawley rejects the argument that retirement communities are glorified nursing homes, insisting that future geriatric care was not on his list of priorities when he bought his two-bedroom flat, although he admits that services such as cleaning and gardening are welcome. 'Having a nurse on site is also useful and gives us peace of mind,' he adds.
The first Retirement Villages development was built at Elmbridge, Surrey, 25 years ago. Now there are eight across the country, with three more planned. Most offer a mix of one- or two-bedroom apartments, cottages and bungalows, ranging in price from £125,000 to £600,000, according to location, age and style of home.
In addition to leisure facilities, several Retirement Villages complexes have on-site nursing homes or a health clinic with medical staff and a visiting GP service. Domestic and maintenance help is also provided and in-home care packages can be arranged.
Properties are sold on a leasehold basis with the company retaining the right to arrange any future sale and take what Gooding calls an 'assignment fee' of between 5 and 12.5 per cent. This money, he says, goes back into the upkeep of village facilities.
In all retirement communities, residents need to budget for service charges, which pay for facilities including on-call medical help, domestic and care staff and maintenance of the buildings and grounds. Retirement Villages charges between £60 and £80 a week, or £3,000-£4,000 a year, but some companies charge well over £6,000 in return for more lavish facilities.
Gooding thinks that, despite the service charges, such arrangements make financial sense for the elderly. 'There is a good investment argument for retirement communities. Residents have a property investment which appreciates at the same rate as the general housing market. The service charges are generally far less than the weekly costs of care in nursing homes, which charge upwards of between £300 and £600 a week.'
Maintaining their independence for as long as possible is a key factor for most elderly people and plays a big part in attracting buyers to retirement communities. Eighty-year-old Neil Fletcher, a former brigadier in the British army, and his wife Mary have lived in the Amesbury Abbey retirement village in Wiltshire for 10 years. 'Ownership comes with no responsibilities,' explains Brigadier Fletcher. 'All the maintenance, gardening and cleaning is taken care of and if we need help the staff are always quick to react.'
Brigadier Fletcher is keen to remain as independent as possible, but says the option of moving into the on-site nursing home should he need to is comforting: 'It's a good concept and I'm better off financially than before, though I do sometimes joke that I'm an inmate rather than a resident.'
Service charges at Amesbury Abbey - one of four retirement communities owned by the Amesbury Abbey Group - start at £2,790 a quarter for a studio apartment and rise to just over £4,000 for a two-bed property. This provides 24-hour medical cover, building and garden maintenance, domestic help and a range of social and practical services.
Mary Cornelius-Reid, the founder and owner of the business, justifies those charges by pointing out that residents have the benefit of stunning historic surroundings amid acres of grounds and high-quality care, including lunch every day, heating and an extensive programme of social functions.
Amesbury Abbey properties are a far cry from more low-key retirement communities, with homes ranging from pretty riverside cottages to historic water towers. Cornelius-Reid points out that she charges well below the market value of such properties, with prices starting as low as £88,000 for a bedsit apartment and rising to £150,000 for a pretty former hunting lodge. Such prices should, in theory, leave downsizing residents with the funds to cover their living costs.
The Amesbury Abbey Group retains the right to buy its properties back at the original sale prices should anyone want to sell, be that 10 or 20 years later. Consequently, residents do not make any profit from the appreciation of their property. When a resident reaches the point at which they decide to move into the on-site nursing home, ownership of their property reverts to the Amesbury Abbey Group and the original purchase capital is used to fund their care for the rest of their days. Any capital remaining after they have passed away goes to the their beneficiaries.
Though criticism of retirement villages focuses mainly on their perceived isolation from the wider community, the residents appear to prefer not having to deal with other social groups on a regular basis and the absence of noisy children is particularly appealing. But there are worries that these communities can foster an insular atmosphere.
'It's a slightly unreal environment, I suppose,' says Mr Cawley, 'but not an unpleasant one. The only problem is that we really do need younger people to move in to keep the social events going. Anyone in their sixties would be very welcome.'