Table of contents

DOI: https://doi.org/10.58248/RR96  

Specialist housing provides older people with a home designed to minimise risks, make it easier to perform daily activities and live independently for longer. It is an important welfare service and a key part of care in later life. 

Private developers are major providers of specialist housing. Private developments usually take the form of flats, which are sold on a leasehold basis (referred to as ‘leasehold retirement living’ in this article). This sector has faced significant criticism in recent years.   

This article describes leasehold retirement living in England, how it is provided, the size of the sector, costs and affordability, how it is regulated, and possible reforms.   

Types of provision 

Specialist housing is distinct from residential care in that it provides people with their own self-contained home.  There are two main types of provision in the private sector: 

  • retirement housing (also known as ‘sheltered housing’): usually purpose-built flats with some communal facilities. There might be some onsite support, such as a warden service or 24-hour assistance via an alarm system.   
  • integrated retirement communities (also known as ‘extra care housing’ or ‘assisted living’): usually purpose-built flats with extensive communal areas. Care is available if required and there is 24-hour access to support services.  

A single development might contain both types of provision.  

A leasehold sector 

In England and Wales, retirement flats are sold on a leasehold basis. Leasehold means that the leaseholder owns the property for a length of time that is specified in the original lease (between 99 and 999 years). The freeholder owns the land the property is built on. The lease forms a contract between the flat-owner (leaseholder) and the landlord (usually the freeholder), and details the rights and responsibilities of each party. 

The freeholder of retirement developments is usually the original developer, who is also often responsible for the management of the scheme.  Sometimes a third-party, such as a property management company, manages the building and provides required services.   

Fees 

Leaseholders in flats are liable to pay various fees to their landlord. The lease agreement will set out what can be charged and how any increases are calculated.  

Fees payable under the terms of a lease continue to apply upon the death of a leaseholder. Beneficiaries of the property will become liable until the property is sold. 

Ground rent  

This is a fee charged on a leasehold property for the land it is built on. Ground rent is usually a relatively small amount (less than £1000 per annum.), but some leases allow annual increases up to relatively high levels.   

Service charge 

This is a fee leaseholders pay for services the freeholder is obliged to provide under the terms of the lease, such as maintenance and repairs, cleaning of shared areas and building insurance.  

Service charges are usually higher in retirement housing than in other leasehold flats, reflecting additional costs such as personal alarm systems and warden services.   

Service charges are typically payable even if the property is vacant. 

Event fees 

Event fees are fees payable by the leaseholder on certain events. They are common in leasehold retirement developments and can go by a variety of names including exit fees, transfer fees, deferred management fees and contingency fees.  

Exit fees are a specific event fee often charged when a leaseholder sells or lets the property. They are typically 1 to 2% of the resale price but can be as high as 30%. Exit fees may allow providers to charge a more affordable service charge, while covering the cost of providing specialist facilities. 

The size of the sector 

Available data suggests that in 2024 there were some 25,000 specialist housing schemes for older people in the UK, providing more than 750,000 units and accommodating some 1 million older people.   

Leasehold retirement living accounts for more than one quarter of specialist housing in the UK (25.5% owner occupied and 2% shared ownership).  Of the rest, 72% is rented from a social landlord and 0.5% is rented privately.   

A distinct geography is associated with leasehold retirement living. Providers prefer to build developments in higher value markets where more older people can afford leasehold retirement living.  This explains large regional variations in provision.   

Cost and affordability 

Most older people prefer to buy a two-bedroom property.  

To afford such a property in England in 2024, buyers need an estimated £450,000 for retirement housing or £470,000 for an integrated retirement community.  These calculations assume buyers need to retain at least £50,000 for other costs, such as care and service charges.   

Most people over 75 cannot afford to buy a leasehold retirement property. A two-bedroom property in retirement housing is affordable to only 37% of older households.  A two-bedroom property in an integrated retirement community is affordable to only 27% of older households.   

The fact that leasehold retirement living is unaffordable to most older people has led to calls to diversify the market and increase provision of more affordable options. 

Regulation of leasehold retirement living 

The legal obligations when operating a retirement community and the rights of leaseholders are informed by leasehold and tenancy management law, consumer protection and the regulation of care providers.   

Legal framework 

Leaseholders have a series of statutory rights established in law.  Examples include the right for qualifying leaseholders to: buy their freehold; extend their lease; ‘vary’ their lease; access information about fees and charges; and manage their block of flats. 

Leaseholders also have lease-based rights.  Examples include: right of access, for example, to shared facilities; freedom from unreasonable interference from the landlord; and rights protecting provisions in the lease. 

Leases also contain restrictions or covenants relating to what the leaseholder can and cannot do. These might include: conditions on making home improvements; restrictions on renting out the property; and restrictions on behaviour, such as causing noise. 

Landlord rights include the right to collect service charges, grant or withhold permissions and act if the leaseholder breaks the terms of the lease. Landlord responsibilities commonly include responsibility for maintaining and repairing the property and providing buildings insurance. 

Code of practice and consumer code 

A code of practice prepared by the Association of Retirement Housing Managers (ARHM) was approved by the government in England. Separate codes have been approved in Scotland and Wales. These codes set out statutory obligations and additional expectations for ARHM members. The code can be used as evidence in a dispute by leaseholders and landlords. 

The Associated Retirement Community Operators (ARCO) has published a consumer code that builds on consumer law and aims to provide a benchmark for good practice within the sector.   

Care regulation 

Retirement living schemes are registered with the Care Quality Commission (CQC) if they provide personal care. CQC inspections focus on people’s personal care and support services, not the premises they live in. 

Problems with leasehold retirement living 

Leasehold retirement living has received a lot of negative publicity in recent years.  Research, media investigations and leaseholder campaign groups have reported various problems with the sector. There is some evidence this has damaged the reputation of retirement living, undermined confidence in the sector and impacted demand.   

Reported problems include: 

  • a lack of transparency and clarity regarding fees 
  • rising costs as ground rent, management fees and service charges increase each year 
  • reductions in the services provided, such as resident management services 
  • high cost of event fees, including exit fees 
  • the requirement to pay service charges even if the property is empty 
  • relatively short leases and the cost of extending a lease 
  • restrictive lease terms limiting leaseholder rights 
  • resale difficulties and ‘poor’ resale values 

Many of these problems are not specific to retirement living. However, they may come as a surprise to older people who have little previous experience of the leasehold retirement sector.   

Pursuing a complaint 

Leaseholders can take various courses of action to try and resolve a problem: 

  • speak directly to the manager or landlord, individually or through a residents’ association 
  • use the manager’s complaints procedure, which should be available to all leaseholders 
  • raise a complaint with the independent Housing Ombudsman, if their landlord is a voluntary member and the complaints procedure fails to resolve the matter 
  • if the problem relates to the service received from a property manager, a leaseholder might be able to raise a complaint with one of two government approved redress schemes 

There is evidence that leaseholders find this complaints system complex and challenging to navigate. 

Reforming retirement living 

Reform proposals typically take three forms: reforms to the leasehold sector, reforms to improve consumer protections in the retirement sector, and reforms designed to expand the market for retirement living.   

Leasehold reform 

There is a long history of leasehold reform. Recent reforms include the banning of ground rent in most new residential leases and plans to cap ground rents on existing properties at £250 a year, reducing to effectively zero after 40 years. 

The draft Commonhold and Leasehold Reform Bill 2026 proposes banning the use of leasehold for most new flats and making commonhold the default tenure. Commonhold is a form of freehold property ownership in England and Wales for flats or interdependent buildings, allowing owners to own their unit indefinitely without a landlord. 

Consultation on the draft bill suggested it might make sense for some retirement developments to remain in the leasehold sector. Some retirement living providers have indicated support for commonhold, while arguing the sector will require special consideration.

The government has also proposed strengthening the regulation of property managing agents and has consulted on proposals to introduce mandatory professional qualifications for managing agents in England.  

Consumer protections in the retirement sector 

Proposed changes to strengthen leaseholders’ protections include: 

  • greater transparency about the regular fees and charges associated with living in a retirement community and a requirement to provide prospective buyers with accurate information about these costs 
  • introducing a new code of practice detailing when an event fee can be charged and, in some cases, the amount that can be charged 

These proposals have previously been made by various inquiries and consultations, but most are yet to be fully implemented.   

Expanding the market for retirement living 

Various reforms have been proposed to drive new supply and increase consumer demand. The focus is on providing options that are more affordable to buy and live in, particularly for poorer households and in regions beyond London and the South East.   

There have also been calls to incentivise the provision of a wider range of options beyond the traditional owner-occupation model. These often draw on learning from other countries with more ‘mature’ retirement markets, such as New Zealand and the USA, and countries where alternative providers (such as the Netherlands) play an important role meeting the needs of households with average and lower levels of wealth.    

Related links 

Leasehold reform in England and Wales: What’s happening and when? 

Archer, T. et al. (2024) What older people want: A rapid evidence assessment on what older people want, and can afford, when it comes to their housing choices when looking to move 

Burgess, G. and Stirling, P. (2021) Understanding supply, demand and investment in the market for retirement housing communities in England. 

JLL (2024) UK Seniors Housing Report.  

Older People’s Housing Task Force (2024) Our Future Homes: Housing that promotes wellbeing and community for an ageing population.   

Robinson, D. and Wilson, I (2023) Specialist housing for older people in an era of neoliberal transformation: exploring provision in England. Housing Studies, 38(9), 1662–1680.  

Acknowledgements 

Professor David Robinson is Professor of Housing and Urban Studies at the University of Sheffield.  

Questions about this briefing should be referred to Oliver Bennett MBE ([email protected]), who acted as parliamentary lead for this work.