Trailblazing new scheme
- Residents of RVG’s new Thrive Living collection will stop paying annual management fees when they leave and receive a pre-agreed sum of money for their home on re-sale.*
- Hassle-free selling, lower annual management fees and no hidden costs sets precedent for later living housing sector.**
- Trailblazing new scheme responds to growing demand for affordable, transparent, and easy to understand retirement living leases.
Monday 20th May 2024: Retirement Villages Group (RVG), owned by AXA IM Alts, has launched a new way to buy and sell its retirement homes, as part of its mission to make retirement living more affordable and accessible, and provide high-quality homes that better meet the needs of the growing population of over 65s.
The introduction of this new and unique way to own a property will enable residents at the developer’s new Thrive Living collection to benefit from lower weekly management fees**, offset against a deferred fee on sale. Weekly fees will also cease two months after the resident has left the property, removing liability on the homeowner, their family, or their estate to continue paying management fees.
Under the new customer contract, RVG will also take on responsibility to refurbish and re-sell the homes, guaranteeing residents the price they initially paid for their home, less the deferred management fee*, ensuring residents complete confidence in the legacy they leave to their families when they leave the community.
This first-of-a-kind financial model for the private retirement living sector has been launched in response to a growing demand for more affordable, transparent, and simple retirement living solutions.
As an ARCO member, RVG abides by the ARCO Consumer Code which requires full transparency regarding fees and charges. According to research published by The Associated Retirement Community Operators (ARCO), when asked to consider moving into retirement housing, 90% of older people say they would be concerned about possible hidden fees and charges. ***
Will Bax, Chief Executive of Retirement Villages Group commented:
“With a rapidly ageing population and housing market at crisis point, we need to act now to transform the options available to older people. This means building more age-appropriate homes that are affordable, with simple and transparent contracts that respond to the concerns of people looking to move in later life. The UK lags behind other markets which offer regulated products that are easier to access with financial arrangements that enable affordability and access for more people.
“Integrated retirement communities are a solution to so many of the social issues facing our ageing society, enabling people to keep living active, independent lives in a setting that supports health and wellbeing. However, financial security is key and there are too many poor examples of mass market retirement housing proving to be a bad investment for elders and creating a long term problem for their families. It’s time to fix that, so our new Thrive Living collection aims to make the process of buying and selling a retirement home as simple and certain as possible. So our residents can focus on the important this in life, feeling safe in the knowledge that they can afford the bills and that their financial legacy is secure.”
Michael Voges, Chief Executive of ARCO (Associated Retirement Community Operators), commented:
“Innovation in older people’s housing is incredibly important. The future of retirement housing in the UK will look very different from the past. That’s why we’re really excited to see ARCO members developing new tenure models and contracts for their customers. The older population is hugely diverse and as the Integrated Retirement Community sector continues to grow, we expect to see more new and varied models coming forward.”
* When a resident passes away, goes into long term care or simply leaves the community, and after 2 months’ notice of vacation, RVG will manage the resale of the property. At the point of resale, RVG will issue a repayment of the price the property was purchased at, minus the event fee (The event fee is a Deferred Management Fee (DMF)). The Deferred Management Fee (DMF) increases each year up to 24 months and a day after a property is purchased.
The DMF covers all costs and fees associated with the sale of the property, so there are no hidden charges upon sale.
** Fees are set annually and cover the daily management of the retirement community, upkeep of facilities and amenities and all bills (except council tax and landlines). Under the new scheme, residents pay on average £120 per week (£6,240 per annum) compared to the existing model of £212 weekly (£11,000 pa) where there is a lower Deferred Management Fee (15%) and no buy-back guarantee.
*** ARCO commissioned YouGov Plc to undertake research looking into why people consider moving into retirement housing in the UK. They conducted an online survey between 14 and 18 April 2022. The total sample size was 4016 adults aged 65 and over.