It was the box hedge that prompted Anne Foster to think seriously about moving house. For 45 years, her husband had clipped the hedge at their five-bedroom family home in the West Midlands; after he died, the annual quote to trim it exceeded £1,000. “I thought, ‘I have three children and seven grandchildren and can spend that money better somewhere else’,” Foster says.
Selling the family home is the obvious way to free up capital to fund living and care costs in retirement, and potentially release equity to family members. Foster considered various options and ultimately bought a two-bedroom cottage in Audley Chalfont Dene, an integrated retirement community (IRC) near Gerrards Cross in Buckinghamshire, nearer to her children. With her own driveway and front door, she could be independent, yet on-site care would be available if she needed it. The fact that she could own the house outright added to the appeal as she didn’t like the idea of renting. “The problem we all face at this stage is that we don’t know how long we will live and how much it will cost,” she says. “I don’t like renting. It might be the answer for some people, but not for me.”
Those born between 1946 and 1964 — the Boomer generation — tend to share Foster’s view. But with price growth in the property market stagnant in many parts of the UK, there’s a quietly changing mood. More people are asking the question: if the time has come to move, is it better to rent than buy?
Approximately 74 per cent of those aged 65 and over in the UK currently own their homes outright, while only 6 per cent rent privately, according to the English Housing Survey. There has long been “a social stigma about renting — people feel they’re giving away their money and not getting anything back”, says Nick Sanderson, founder and chief executive of Audley Group, the UK’s largest retirement village provider, which operates Chalfont Dene. And, as Foster points out, if you’re in the lucky position to be able to plan your retirement, you want to know you can afford your accommodation as care costs, if they come to bear, can spiral.
Live-in care now ranges from £1,200 to £1,500 per week on average, rising to approximately £1,800 for additional needs. Nursing homes cost from £1,410 per week. “Care is a major problem for people my age. People within my community are seriously worried,” Foster adds.
Given the record levels of wealth the Boomers accumulated through property ownership, it’s only natural that they’d look to it as a way of funding retirement. The housing market rose 25-fold between 1975 and 2025 with capital gains far outpacing inflation, according to Land Registry data. Homeowners aged over 60 in the UK now hold roughly £2.89tr in housing wealth, representing 56 per cent of the nation’s owner-occupied homes. This generation has a longer life expectancy than generations before them. (In the UK, average life expectancy is around 79 and 83 years, for men and women respectively, rising in wealthier areas.) This is making them even more reluctant to step off the housing ladder in retirement — why would they want to spend down their precious equity renting for two decades? “Only about 5 per cent of callers ask about renting,” says Paul Morgan of Wallacea Living, a new IRC in West London. “Renting adds up and if you buy, you still have an asset to hand on.”
Yet attitudes towards renting in later life are beginning to shift. The English Housing Survey shows the proportion of private renters aged 65 and over has risen by about a third since 2009. Meanwhile the Pensions Policy Institute forecasts that by 2041 around 17 per cent of over-65s could be in private rented accommodation (almost tripling from current levels). Renting is also gaining ground within IRCs run by operators such as Audley, Pegasus and Auriens: about 10 per cent of units are now let across the sector, according to the Association of Retirement Community Operators (Arco). Knight Frank puts the current number of private IRC rental homes at around 4,500, and expects this number to double to around 10,000 over the next five years, following a trend towards renting that mirrors the US.
Liz Greetham was in her early seventies and her husband in his mid-seventies when they moved into a rented two-bedroom apartment in Auriens Chelsea, an IRC a few minutes’ walk from their previous home. They’d seen similar communities while living in the US and liked the idea of distributing wealth to their children and grandchildren, and moving somewhere with lifestyle and wellness facilities to enhance their later life. They originally planned to buy a two-bedroom property and only moved into a rented apartment temporarily, but have decided to rent permanently. “We realised we like the flexibility of knowing that we can walk out if we want. The life enrichment programme is incredible and the restaurant and spa high quality — but if I gave in our notice today we could be doing something different in three months,” Greetham says.
Greetham adds that she has lost confidence in the property market. Retirees are realising they can no longer expect meaningful capital appreciation: the mortgage squeeze, sluggish GDP growth, and geopolitical and fiscal uncertainty has prompted both Savills and Knight Frank to forecast modest growth over the coming years.
“Buying is fine if you know your home is going up 5 per cent a year, but now that it’s not, an increasing number of downsizers are wondering if it’s better to keep the money from their home sale and rent,” says Sanderson.
But for those moving house in their sixties or seventies, the figures are still stacked strongly in favour of ownership. Analysis of Office for National Statistics figures by Standard Life suggests that, over the course of a 20-year retirement, an individual in rented accommodation will need to find, on average, an additional £398,000 in savings and pension income compared to a resident living rent- and mortgage-free, factoring in a 3.7 per cent increase in rent each year. In regions such as the north-east, this could be less — around £269,000 — but in London it stands to be much more, approximately £833,000. Knight Frank estimates this to be higher — more than £1mn, even before any annual increase in rent has been factored in.
Meanwhile, renters also face the uncertainty that comes with being a long-term tenant: Labour’s rent reforms, part of the Renters’ Rights Act being implemented in May, strengthen tenant protections, though landlords can still decide to sell the property or increase rent where permitted. “You need to have a good landlord,” says Lucie Spencer, a financial adviser at Evelyn Partners, specialising in later-life planning. “You don’t want to be left finding somewhere to live at short notice, and you need to know that you can adapt the property as you age.”
For Foster, now 86, who has lived very happily in her cottage for 10 years, buying a smaller home has paid off. She has budgeted for the monthly service charge and ground rent, and has no qualms about the deferred management fee (1 per cent for every year she’s owned the property, capped at 15 per cent) payable to Audley when the property is sold, which will contribute to the upkeep of the retirement village as a whole.
According to Henry Lumby of Auriens, which has 56 apartments for sale and rent, deferred fees ensure monthly service charges can be kept down and the operator is incentivised to keep their standards up. In Foster’s case, she hopes the monthly fee (ranging from £700 to £1,334, depending on property size, plus £500 annual ground rent) will be covered by capital growth when she sells. Cottages such as hers, bought off-plan for £800,000 in 2016, are selling for £950,000, which means that if she were to sell now, 10 years after purchase, the deferred charge would be approximately £95,000.
Those moving now cannot bank on such gains, however. In addition, while there is a lack of resale data in new IRCs, high maintenance charges, exit fees and age restrictions associated with IRCs mean they can stay unsold for prolonged periods, according to Homeowners Alliance. Knight Frank puts the average time it takes to sell a property in an IRC at just over 9.3 months.
But properties outside IRCs are not moving quickly in the current climate either. Greetham, whose mother will be 99 this year and is living in a care home in Sussex, has experienced how tricky it can be to finance residential care if a property is taking time to sell. “My mother was lucky: my father was successful and a great BP pension comes in every month, but the money just goes out the door when you need care,” Greetham says. “We’ve burnt through all her liquid assets and the only thing we have left is the house she and my father retired to. But we can’t sell it. Retired couples want it, but they’ve always got a big family house to sell and no one is buying right now.”
The number of homes for sale is now at its highest level for 11 years, according to Rightmove. After exploring various equity release schemes without success, Greetham eventually discovered that Buckinghamshire County Council offers a deferred payment agreement, whereby a legal charge is placed on the property to cover the cost of care, repaid once the property is sold or from the estate.
For those in their eighties and nineties, moving into rental accommodation can help with liquidity. There’s no stamp duty to pay and, in the case of those looking to move into dedicated retirement housing, none of the associated maintenance costs. Renting can also make more sense in an IRC, where owners must pay a monthly service charge plus ground rent and, in most cases, a deferred management fee on sale of the property, which can vary from 1 per cent to as much as 30 per cent, according to figures from Knight Frank, depending on the development and how long the resident has lived there.
The average stay in an IRC is 7.4 years, according to Knight Frank. “If you’re going to be there for less than that, it can make more sense to rent,” says Tom Scaife, the agency’s head of Senior Housing, adding that, in comparison, the average stay in rented retirement housing is between four and five years. “It seems crazy to pay these extra charges at this stage in your life,” Sanderson says. “If you’re delaying a move until later in life and don’t see house price inflation while you’re living there and there is stamp duty to pay and the associated fees of exiting, just think how much rent would have been covered.”
As tenants, the Greethams are not responsible for the maintenance and upkeep of their property in Auriens. “Studies show that, by moving to appropriate accommodation, you can have a higher quality of life for longer,” Scaife says. “Plus, as a tenant, you hold the sword compared to an owner — if the accommodation is not up to scratch, you can leave.”
A two-bedroom apartment such as theirs costs from £3,995mn; renting is £29,000 per month, not including utility bills. Nevertheless, Greetham is content with her decision to rent, even if it means they ultimately pay more over a 20-year period. “Whichever way you do it — rent or buy — you’ve got a finite number of years you can afford,” she says.
Victoria Avon, a former lawyer whose father, Humphrey, moved into KYN Hurlingham, a high-end care and retirement home in Fulham, west London, two years ago, agrees that there is a value to be placed on liquidity for movers in their eighties and nineties. Humphrey, like many of his generation, was determined to stay in the family home for as long as possible and facilitating this was a priority for the family. Yet when round-the-clock care became a necessity, he was met with the combined cost of KYN’s fees, which start at £3,900 per week, plus the running costs of his house in West Sussex. “I was worried we’d run out of cash. In the end, we had to take a hit on the sale price of the house to get through,” she says.
Those releasing adequate equity in their sixties and moving into a property with access to full care, such Auriens or Wallacea Living, can avoid this situation. “It’s easy to forget when you’re fit and healthy that your world can become very small very quickly — the earlier you can instigate and plan, the better,” advises Lumby. Yet Avon is certain she could never have persuaded her father to swap his home for a property in an IRC — rented or bought. “Dad has never owned a leasehold in his life. He wouldn’t have been interested,” she says. She agrees with Caroline Naidoo, chief executive of KYN, who maintains the financial decisions one makes in one’s sixties and seventies are often very different to those in your eighties and nineties. “Resolving to rent in later life can take the pressure off — both emotionally and financially,” she says.
Spencer, who helps her clients to plan their retirement strategically, insists there is no definitive right or wrong answer when it comes to renting or buying. Age, finances, health and family must all be factored into the decision. Humphrey agrees: “It’s a grey area, depending on how long you’re going to live and how much capital you’ve got,” he says. “But now I’ve sold everything I’ve got, there’s a nice pot of money.”
Avon has no regrets that her father has exited the property market. She has witnessed friends struggling to sell their parents’ properties in retirement communities once they die, in the meantime incurring service charge and ground rent. “At this stage of his life, it’s freeing to be cash rich. We’re ready to go,” she says.
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