My mum wants to buy a retirement flat: Is it a bad idea?

My dad died a year ago and my mum is looking to downsize. Her health isn't as good as it used to be and she's finding the house increasingly difficult to manage.

My mum has started looking online for properties and keeps spotting retirement flats she likes the look of. Some of them look lovely.

I have concerns about her buying a retirement flat, but don't know too much about them. My brother has read horror stories about sky-high fees and isn't keen at all.

What should my mum look out for when she starts viewing retirement flats, and what are the potential pitfalls?

Jane Denton, of This is Money, replies: Retirement properties are aimed at older buyers and can come in the form of houses, flats or bungalows.

Buying a retirement flat can be an appealing option. There's often a community on site, a range of facilities available and, in some cases, round the clock wardens, care packages or security.

However, you are right to be cautious.

Your mum would need to ensure she does not ending up paying too much for a retirement flat.

In some cases, the purchase price can be far higher than a comparable home on the open market - and that is before you pay for the additional services.

Before taking the plunge, your mum would need to look very carefully at any service charges.

According to the care home comparison website Lottie, the average weekly service charge for a retirement property is £120.93, while the average monthly service charge is £523.99. This can be much higher depending on the facilities available.

Service charges often rise year-on-year. While residents can challenge the management company on these, doing so can be time-consuming and stressful.

Most retirement properties are sold leasehold, so the length of the remaining lease is also something to watch put for. A short lease could affect the resale value of the property, and extending it can prove costly.

Your mum would also need to be careful of any exit or transfer fees which could kick in later down the line. Because of the limited pool of buyers retirement properties are also often harder to sell, with some selling at a loss.

I have asked two solicitors for their thoughts on your question.

Thom Wilkinson, a partner at Bishop & Sewell LLP, says: Specialist retirement flats are a relatively new addition to the housing market and come in a variety of formats.

These all have different arrangements and leases, so you would benefit from ensuring that the solicitor or conveyancer acting on any purchase explains the pros and cons to you clearly.

In many cases, retirement flats in well-run developments can provide appropriate housing for people downsizing in later life along with many benefits.

These can include a ready-made community, well maintained and energy efficient housing of an appropriate size in a good location and, if required, access to nursing care, wardens or supervision.

However, any services of this nature have to be paid for, and are only good value to an individual to the extent that they are needed or used.

There are two main drawbacks your mum would need to consider, namely ongoing costs and ease of disposal.

For most retirement flats, there will be a service charge levied to recoup the costs of all communal expenses.

The sum of these will normally be set out in the lease, and for an established development there should also be a service charge history detailing the levels of previous expenditure which can be reviewed.

However as a basic rule of thumb the more services offered, the higher the charges will be.

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The service charge may be charged on an ongoing basis, for example every six months or a year, or it may be rolled up with interest accruing and being repaid only when the property is sold. Either way, there is a cashflow consideration.

The other major issue is the ease - or otherwise - of resale. Some retirement flats have to be resold on the open market, while others have specific provisions requiring either a right of first refusal for the freeholder to repurchase them, or even for the lease to be surrendered back to the freeholder.

Either of these options can require a payment to the seller that is less than the figure they consider to be the market value.

Even with a sale on the open market you would need to consider that the group of likely purchasers is not that wide as there are minimum age limits on who can purchase.

What's more, if the flat being sold is on a brand new development, it may be offered for sale at the same time as a newer phase of flats and may suffer in comparison.

Therefore, retirement flats may not increase in value in the same way that the general property market may over the same period.

There are a lot of benefits to this type of option for the right purchaser. However, there are a lot of issues to consider both in general and for each specific development and lease.

Ensure your solicitor explains the potential benefits and pitfalls of the property, and the options on resale.

Lisa Gibbs, a partner at HCR Law, says: Retirement flats are an attractive option for the elderly, but there are several matters to consider before deciding to proceed with a purchase.

Some owners or their families have subsequently found the flats difficult to sell.

First, check the length of the lease. A shorter lease with less than 80 years left to run may mean that you would have to pay to extend the lease when you or your family sell the property.

This involves paying a premium to the landlord, in addition to paying legal costs for your solicitor and your landlord's solicitor.

The lease extension process can also take a few weeks and could delay any sale conveyancing process.

Second, ask about the level of service charge. If you are a house owner, you will pay for all outgoings, bills and repairs, including external decoration and window cleaning.

A flat owner must also pay a proportionate share of the outgoings for the block. This will include buildings insurance, cleaning for the communal areas and the provision of communal facilities, such as dining areas.

These costs vary between developments and can range from £1,200 to more than £4,000 a year. A service charge is not a constant figure, and can increase from year to year.

Also, watch out for age restrictions. Most retirement leases will provide that the buyer or permanent occupier must be older than 55 or 60. Leases will also often require the buyer to be capable of living independently.

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In addition, the age of any cohabitee must meet the landlord's requirements. On a typical retirement flat lease, the buyer must be over 60 and any cohabitee must be over 55.

Even if the block of flats has been built recently, do obtain a survey. This would highlight if there has been any water ingress from the flat above.

You should also get advice on the re-sale value and ask if there is evidence that the value of flats in the block has held up over time.

Finally, ask to see the latest Fire Risk Assessment and any EWS1 report on cladding.

It is important to ensure that the block is well-managed from a fire safety perspective. If applicable, your mum will need to ensure that the landlord has carried out any cladding or balcony remediation works required.

If remediation works are yet to be undertaken, your mum may have to bear a proportionate cost of this in future, which can be very expensive. Do get a solicitor to check all the details.