Coronavirus Read our latest advice

We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies. You can understand more and change your cookies preferences here.

Financing care
Learn about funding options for home care, home adaptations and care homes, together with Attendance Allowance, gifting assets and Power of Attorney.
Housing options
Consider your options and learn about sheltered housing, retirement villages and care homes.
End of life
Guidance on the practical and emotional aspects at the end of life, from planning end of life care to arranging a funeral and coping with bereavement.

Hidden costs of retirement homes

If you’re planning to move into a retirement village, make sure you’re clear about the hidden costs and fees.
4 min read
In this article
Event fees Ground rent Maintenance fees and services charges
Lease renewal Conditions of sale Should you consider renting?

Event fees

Retirement properties are almost always sold on a leasehold rather than freehold basis. Many of these leases require the owner to pay a fee on certain events to the freeholder, such as when selling, sub-letting or there’s a change of occupancy. These are called ‘event fees’ (also known as exit fees or transfer fees). This is an additional charge that is built into the lease that you don’t get with normal properties.

These fees may be calculated as a percentage of the re-sale price or market value of the property. Fees can vary greatly – some schemes charge around 2%, while others swing between 10% and 30%. Get clarity on these fees before signing any contracts. Information about the fee and how it’s calculated often lacks transparency, and it isn’t uncommon for leaseholders to be stung with unexpected costs when selling.

Look out for companies signed up to one of the following Codes of Practice, which each contain provisions about event fees and are designed to give residents greater protection:

The Law Commission has been investigating this area because they believe that event fees should be regulated with the introduction of a new code of practice. They have asked for this to be approved by the Secretary of State for Communities and Local Government. The government has replied with an interim response saying the Department for Housing and Planning is considering the report. For more detail, see the Law Commission's website.

Ground rent

On a leasehold property, a tenancy is granted for a long period of time. It’s usual for leaseholders to pay a large amount upfront with smaller ‘ground rent’ payments to the freeholder annually. This may be as low as £50, but can be £300 or more.


Be aware that there have been some extreme cases in recent years, where companies have increased ground rent by up to 90%, sometimes with very little notice. If you’re considering buying a retirement home, enlist the help of a solicitor to go through the terms and question how changes to fees and ground rent will be dealt with.


You can find more information about ground rent on Which? Money.

Maintenance fees and services charges

Make careful enquiries about the management structure as this can affect your finances considerably. Some retirement villages are run by a residents’ management company or a Right to Manage company, which generally have lower service charges. If not, the management will be run by the freeholders, and residents will have little say on what they are charged for repairs and maintenance.

Also find out what happens about the maintenance fees and service charges if you die. Often, retirement flats go back on the market when the owner dies, but the service charges continue to be charged until the property sells. This can result in thousands of pounds of fees adding up while your relatives try to sell the property. 

Receive expert guidance on caring for older people. Our emails are free and you can stop them any time.

Lease renewal

If the lease has fewer than 80 years to run it will prove costly to renew and the property’s value will also suffer. Check the length of the remaining lease is acceptable before buying, always taking into consideration the length of time you could possibly be living there before the time may come to sell.

Read more information about leaseholds and when they should be extended on Which? Money.

Conditions of sale

Be aware that some freeholders make it a condition of sale that you must resell through their company, which usually incurs a higher percentage than selling through an estate agent, so make sure you check the terms before buying.

It’s also not always easy to sell retirement properties. Statistics show that a property is likely to drop in value by the time you want to sell, despite a property and village’s glossy facade and appealing amenities.

Should you consider renting?

It may suit you better to rent a retirement property instead of buying one. Your rental costs usually include all services costs, ground rent and property maintenance fees, removing the worry about the upkeep of your home and its surroundings.

Which? Wills
From writing your will, to setting up your Power of Attorney, Which? is here to help you make important decisions for your future.

Further reading

Last updated: 03 Mar 2020