{"id":446,"date":"2017-10-11T16:03:05","date_gmt":"2017-10-11T15:03:05","guid":{"rendered":"http:\/\/glastonburypropertynews.co.uk\/?p=446"},"modified":"2017-10-11T16:03:05","modified_gmt":"2017-10-11T15:03:05","slug":"are-retirement-properties-in-street-and-glastonbury-a-good-investment","status":"publish","type":"post","link":"https:\/\/glastonburypropertynews.co.uk\/?p=446","title":{"rendered":"Are retirement properties in Street and Glastonbury a good investment?"},"content":{"rendered":"

A story featured on BBC Somerset on 18th September highlighted the plight of Jackie Thomas from Street who has struggled to sell her retirement property. Jackie had dropped the asking price of her property from \u00a3166,000 to \u00a3100,000 but still could not find a buyer to fund her care. Full story here<\/a><\/p>\n

The story came off the back of research by the Elderly Accommodation Counsel (EAC) charity that found half of new-build retirement homes sell at a loss. Full story here<\/a><\/p>\n

Attracted by the high asking rents that retirement properties sometimes achieve, only last week an investor asked me if retirement properties in the area were a good investment?<\/p>\n

To answer the question, I looked at 3 popular retirement developments in the area:<\/p>\n

\u2022\u00a0Cavendish Lodge (Glastonbury)
\n\u2022\u00a0Bluestone Court (Street)
\n\u2022\u00a0Tor View Court (Street)<\/p>\n

Capital Growth<\/strong><\/p>\n

Looking at the most recent transactions for properties re-sold in these 3 developments after the original new build purchase reveals the average percentage loss<\/strong> for each seller was:<\/p>\n

\u2022\u00a0Cavendish Lodge 11.9%
\n\u2022\u00a0Bluestone Court 12%
\n\u2022\u00a0Tor View Court 23.2%<\/p>\n

An average loss of 15.7%!<\/strong><\/p>\n

This data from the Land Registry mirrors what the EAC research found. From a property investment perspective, the data suggests until now retirement properties in this area have not given a good return.<\/p>\n

Looking at the data, ignoring a few odd transactions in 2006 at Bluestone Court, not one of the properties in any of these 3 developments has achieved their original sale price.<\/p>\n

This would suggest to me that the developers and original buyers over-valued the properties as an investment \u2013 buyers perhaps attracted to the retirement dream that can be packaged as part of the developer\u2019s marketing. I understand the appeal of a retirement property but the features come at a price in the form of ground rents and service charges and my research makes no account of these costs.<\/p>\n

Why has the capital growth been so poor?<\/strong><\/p>\n

Nobody knows for certain but it could be the high new build premium placed on retirement housing.<\/p>\n

Rents<\/strong><\/p>\n

A quick check of asking rents in the last 12 months around these 3 developments:<\/p>\n

\u2022\u00a0Cavendish Lodge \u2013 1 bed \u00a3775 per calendar month
\n\u2022\u00a0Bluestone Court \u2013 1 bed \u00a3595 per calendar month
\n\u2022\u00a0Tor View Court \u2013 1 bed \u00a3550 per calendar month, 2 beds \u00a3650 per calendar month<\/p>\n

If you could pick a retirement property up at a reasonable asking price and the yield is attractive then why not \u2013 the properties are well constructed in good central locations. Beware of ground rents and service charges eating into your pension pot though. Would I buy a retirement property as an investment? No not based on this research, not unless the developer offered me a minimum 25% discount off the ticket price.<\/p>\n","protected":false},"excerpt":{"rendered":"

A story featured on BBC Somerset on 18th September highlighted the plight of Jackie Thomas from Street who has struggled to sell her retirement property. Jackie had dropped the asking price of her property from \u00a3166,000 to \u00a3100,000 but still could not find a buyer to fund her care. Full story here The story came […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1,3],"tags":[],"_links":{"self":[{"href":"https:\/\/glastonburypropertynews.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/446"}],"collection":[{"href":"https:\/\/glastonburypropertynews.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/glastonburypropertynews.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/glastonburypropertynews.co.uk\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/glastonburypropertynews.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=446"}],"version-history":[{"count":1,"href":"https:\/\/glastonburypropertynews.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/446\/revisions"}],"predecessor-version":[{"id":447,"href":"https:\/\/glastonburypropertynews.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/446\/revisions\/447"}],"wp:attachment":[{"href":"https:\/\/glastonburypropertynews.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=446"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/glastonburypropertynews.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=446"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/glastonburypropertynews.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=446"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}