Can You Buy an Over 55s Property for a Parent or Grandparent?
Answered on 24 September 2024 by Nicholas Mendes
Can a young person buy a retirement property for their parents or grandparent? My husband and I wish to buy a property with an over 55 years age restriction on the resident. We would be buying this property for my grandparent to live in. We would need a minimal mortgage of approximately 50% LTV, on a property worth £70,000. Is this possible?
Yes, it is generally possible to buy a property designated for individuals over 55 for a parent or grandparent. Properties designed for people over 55 often come with features and amenities that cater to the needs and preferences of older individuals, such as accessibility features, community facilities, and sometimes on-site support services.
Over 55 Retirement Properties
It may be worth looking at our borrowing into retirement guide.
These retirement properties are very difficult to place when it comes to getting a mortgage and the majority are bought for cash when people downsize. The problem for lenders is the age restriction means they have less chance of achieving a quick sale if the property is repossessed.
If you haven’t retired yet, you may need your pension provider to give confirmation of:
- Your expected retirement date
- Your current pension pot value
- Your expected retirement income
However, as you are putting down 50% of the property value there would be a good chance of finding a lender willing to take the risk and lend you the money. They will want to be sure that the restriction only applies to occupancy, not ownership and that you have sufficient income to be able to support this mortgage along with any existing credit commitments that you already have.
Before going ahead, you may wish to consider what will happen when you come to sell the property, it is very likely any prospective buyers are going to have the same difficulty raising a mortgage as you.
Other considerations
When considering such a purchase, here are some key points to keep in mind:
- Age restrictions - ensure that the property is designated for individuals over 55, as there might be age restrictions in place
- Legal considerations - understand the legal aspects of purchasing a property on behalf of someone else. You may need to consider legal arrangements, such as power of attorney, to handle the transaction on their behalf
- Financing - if you're seeking a mortgage to finance the purchase, be aware that lenders may have specific criteria for properties designated for older individuals. Discuss the financing options with a mortgage advisor to understand any potential challenges
- Resale restrictions - check whether there are any restrictions on selling the property in the future. Some over-55s properties may have specific resale conditions or restrictions
- Community rules - properties designed for older individuals often come with specific community rules or regulations. Make sure that these align with the preferences and needs of your parent or grandparent
It’s important to consult with an experienced broker like John Charcol when dealing with properties for older individuals and seek legal advice can be beneficial in navigating the process smoothly. Additionally, keeping your parent or grandparent involved in the decision-making process and considering their preferences and needs is crucial when choosing a suitable property.
Please call 0330 433 2927 and we will then be able to help you find the right solution.
Ask The Mortgage Experts answers are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them. We recommend you seek professional advice with regard to any of these topics where appropriate.