Best Places to Retire in the UK: Investing in Property For Retirement
If you’re looking for the best place to retire in the UK, there are a number of locations that offer a high quality of life, the services and amenities those of retirement age look for, and sound property investments or rental opportunities.
In this article, we take a look at what makes a good retirement destination, what to look for in a property for retirement and the best place to retire in the UK.
Criteria for an Ideal Retirement Location
The best place to retire in the UK depends on a number of factors. Choosing the right location and property will greatly impact quality of life during retirement. Here are some of the things you should keep in mind regarding your retirement property:
- Proximity to Essential Services
Accessibility to essential services such as healthcare facilities, pharmacies and recreational centres is a key consideration for retirees. With age, the availability of quality healthcare and other senior services becomes increasingly important.
Retirement locations should ideally be close to quality hospitals, clinics, pharmacies, and facilities for social activities catering to retirees.
- Peaceful Environment and Low Crime Rate
A peaceful environment is crucial for retirees, as safety becomes a higher priority with age. Researching the crime statistics and general safety of potential retirement locations is important.
Look for towns and neighbourhoods with low crime rates and a tranquil atmosphere where there is already a community of retirees.
- Affordable Living Costs
The cost of living is a significant factor in choosing a retirement location. It includes not just the housing costs but also the general expenses like groceries, utilities and care costs.
Some locations in the UK offer a lower cost of living, making them attractive to retirees managing their finances on a fixed income.
- Active and Vibrant Community
Social engagement and community are essential for a fulfilling retirement. Look for areas with an active and vibrant community of retirees, with opportunities for socialising and hobbies.
This could include 55+ communities, towns with a high percentage of senior residents often found by the coast, or cities known for their retiree-friendly amenities.
Understanding What Retirees Look for in a Property
Retirees are a specific property market demographic due to their unique needs, preferences and lifestyle choices, which differ significantly from other demographic groups.
Here are some of the priorities retirees focus on when choosing their property:
- Lifestyle Shifts and Downsizing
Many retirees seek to downsize from their current homes as they no longer need the space they once had when they had children living at home. The best place to retire in the UK is one where properties are easier to maintain and better suited to their current lifestyles.
Retirees highly favour properties that offer easy accessibility. This includes no-step entries, single-level floor plans and wider doorways and hallways to accommodate mobility aids. Bathrooms might be equipped with walk-in showers and grab bars for added safety.
- Property Layout
People may face mobility issues, such as difficulty climbing stairs as they age. Properties like bungalows offer the advantage of being single-story, making them appealing to retirees.
- Outdoor Space and Pet-Friendly Policies
Private outdoor space for gardening and pet-friendly policies are important for retirees who value their hobbies and pets as companions.
- Low Maintenance Requirements
Retirees often prefer homes that require minimal upkeep. This means looking for properties with easy-to-maintain gardens, durable and low-maintenance building materials and simple landscaping.
- Energy Efficiency and Cost-Effectiveness
Energy-efficient homes that help reduce utility bills are desirable. Retirees might look for properties with good insulation, energy-efficient appliances and renewable energy sources like solar panels.
The Potential Growth of Property Values in Retirement Hotspots
According to property management company Firstport, sales in the southwest of England during the summer months of 2023 increased by 32%, up by almost a third compared to the same time the previous year. Dorset and Devon secured the top spot for retirees who value proximity to nature and outdoor space, making them amongst the best places to retire in the UK.
Over 90% of the sales in the Southwest between May, June and July 2023 were at retirement developments just minutes from the coast. Buyers were also keen to settle in Cheltenham – a picturesque spa town on the edge of The Cotswolds in Gloucestershire .
UK Retirement Market Trends
- Growing Numbers of Retirees
There are currently around 20 million people over 55 in the UK. The 1960s baby boomers are now in their 50s and 60s, and it’s estimated that there will be a further 7.5 million UK residents aged 65 and over by 2069 . This would take the UK’s 65+ age group to 19.8 million people, 26.2% of the projected population .
Baby boomers don’t live the sedentary lifestyle that many of their parents or grandparents did. Currently, fewer than 1% of UK retirees live in retirement communities. However, their popularity is on the rise due to the vast associated health benefits of this style of living.
Growing Attention Given to Retirement Communities
Research from Octopus Real Estate estimates that there could be as many as 2.5 million UK retirees needing retirement properties in the near future .
The significance of retirement communities is gaining attention in public policy. Highlighted in the Mayhew Report from July 2020, it’s suggested that these communities could enhance residents’ health and well-being while reducing healthcare and social care costs.
The report points out that many over-65s in the UK live in homes that are larger than necessary, with numerous unoccupied bedrooms. This situation contributes to challenges faced by families attempting to enter the housing market, adding to the UK housing crisis.
UK Property Market Trends
While retirees represent a distinct demographic with unique needs, it’s also crucial for investors to remain aware of broader housing market trends throughout the UK.
- UK Property Market Growth
The overall UK property market saw a significant 20%+ increase in house prices over the last three years post-pandemic, suggesting that property investment remains robust in many parts of the country.
Currently, the UK housing market is treading water. House prices, which had skyrocketed by 44% nationally and 74% in London since 2007, faced downward pressure due to rising mortgage rates.
The market outlook suggests falling prices in 2024 and potential affordability challenges due to higher borrowing rates and inflation-related economic pressures
- Emergence of Northern England
The North East of England was been highlighted as strong for property investment in 2023. While the focus here is not exclusively on retirement properties, the lower cost of living and property prices in these areas could make them attractive retirement destinations .
- Changing Destination Retirement Trend
If you’re wondering where to retire, destination retirement trends in the UK have seen shifts in recent years. Traditionally, popular retirement destinations for UK retirees included European countries like Spain, France and Portugal, but Brexit has introduced complexities such as visa requirements and access to healthcare.
Instead, there’s a growing trend of retirees choosing to stay within the UK, focusing on areas that offer natural beauty, accessibility and a lower cost of living, like coastal towns and rural villages. The UK market itself is adapting to this change, with increased investment in domestic retirement communities and properties that cater to the evolving needs of the ageing population.
Top Locations for Retirement in the UK
Here are some of the best places to retire in the UK based on affordability, access to services and quality of life.
Bournemouth offers retirees a dynamic lifestyle with plenty of leisure and social activities. The property market in Bournemouth is attractive due to its coastal location, offering a mix of traditional and modern living options suitable for retirees.
Bournemouth has traditionally been known as a popular retirement destination, but recent demographic changes have broadened its appeal. The town’s evolving property market landscape is also attracting young professionals.
Over the past decade, the Bournemouth property market has seen substantial growth. While not the cheapest place to retire in the UK, From 2011 to 2021, the average price paid for a detached home in Bournemouth increased by 40.1%, or £195,200. Similarly, the average value of semi-detached homes rose by 35.8%, or £78,200 .
Bournemouth has been identified as one of the top areas for the development of seniors’ housing in England. However, there needs to be more private extra care accommodation and more recently constructed affordable homes for retirees.
Located in Devon, Torquay is one of the best retirement places UK and is famous for its beautiful coastline. It’s a perfect spot for retirees who enjoy seaside living and outdoor activities. The area’s popularity among retirees is reflected in its stable property market, with various housing options catering to different preferences and budgets.
Torbay’s housing market has experienced a significant price increase in recent years, reflecting a growing demand for properties in this coastal region. There’s a noticeable trend of buyers from outside the region, particularly from cities, investing in Torbay’s property market.
Recent figures show a slight drop—the average home in Torbay was £266,922 in December 2023, and the last set of figures for August showed that it had slightly decreased to £260,544.
The first half of 2024 is expected to see a continued steady hold of house prices. In 2025, there should be a slow and steady increase in average national house prices between 2% and 3%, with more normal rises of 4% to 6% a year by 2027-8 .
Cheltenham, a spa town in Gloucestershire, is known for its Regency architecture and cultural festivals. Cheltenham’s property market is characterised by its charming historic homes and modern developments.
Cheltenham is home to a number of retirement communities and retirement apartments and is known as one of the best places to retire. Named by the Sunday Times as the ‘Best Place to Live’ in the South West, the Cotswold spa town of Cheltenham has everything for a fantastic retirement lifestyle .
Guildford, located in West Surrey and near London, is acclaimed for its accessibility and outdoor activities. Numerous National Trust locations offer retirees a wide range of outdoor walks and activities.
Guildford boasts a low crime rate, making it a safe and community-driven location. Its popularity among retirees is evident in the available community locations and developments in the surrounding Surrey countryside .
In southwest England, Swindon is celebrated for its rich cultural heritage, including museums and art collections. It ranks highly for safety with one of the lowest crime rates and has excellent access to National Trust places.
Swindon has seen a significant increase (28.6%) in the over-65 population in the last decade. This surge indicates its growing popularity and potential as a retirement destination .
Exmouth, located in East Devon, boasts stunning seaside views and a friendly community atmosphere. It’s ideal for retirees who prefer a quieter yet engaging lifestyle.
The town’s property market is diverse, offering everything from beachfront properties to inland homes, suitable for various retirement plans. A number of retirement properties have been approved, making one of the best places to retire in the UK .
Poole in Dorset offers retirees picturesque natural harbours and beaches. Its vibrant community life and natural beauty make it a sought-after retirement destination. Londoners and downsizers are looking in the more affordable areas of the English coastal town, and Pool has become popular.
Property on Sandbanks has attracted a premium for many years. According to Savills, the average property price in Sandbanks in 2020 was £1,180,247. With waterfront houses going for at least £3.5m, buyers, including downsizers and retirees, are looking to other areas close by like Lilliput .
Benefits of Investing in Retirement Destinations in the UK
- Stable Demand Due to an Ageing Population
The UK’s ageing population ensures a steady demand for retirement properties. As the proportion of older adults increases, the need for suitable housing options rises, making investments in retirement destinations more secure and in constant demand. There are over 11 million people aged 65 and in ten years’ time, this will have increased to 13 million people, 22% of the population .
- Opportunities for Rental Income
Retirement destinations offer lucrative opportunities for rental income, either from retirees seeking long-term residences or holidaymakers looking for short-term stays.
These areas often attract a consistent flow of tourists and retirees, ensuring a potentially continuous source of rental income.
- Lower Risk of Property Value Depreciation
Retirement properties in the UK typically face lower risks of value depreciation. These areas are often in desirable locations with limited space for new developments, which helps maintain property values over time.
However, there are some downsides, too:
- Complexity in Selling: Dedicated retirement properties can be harder to sell compared to standard homes, often due to restrictions like age limits for residents and fees related to resale.
- Declining Value: Properties might not appreciate like standard properties. Some have been found to depreciate, affecting the return on investment.
- Service Charges and Exit Fees: High service charges and exit fees are common in dedicated retirement homes, impacting profitability and affordability.
- Niche Market Appeal: While there is a growing market for retirement properties due to an ageing population, it remains a niche sector with specific challenges and demands.
Challenges for Investors Investing in Retirement Properties in the UK
As well as benefits, investors should be aware of some of the potential drawbacks of investing in retirement properties:
- Catering to the Specific Needs of the Elderly
Retirement properties need to address the unique requirements of the elderly, which include accessibility, security and the availability of health and social care services. These requirements influence construction and design and impact ongoing management and maintenance. Retirement homes and assisted living facilities often offer these amenities but come with additional costs and responsibilities.
- Potential for Slower Property Value Appreciation
Compared to city properties, retirement properties sometimes see a slower rate of value appreciation. This is partly because the market for these properties is more niche, targeting a specific demographic. The resale value of retirement homes can also be impacted by factors such as location and the availability of amenities.
- Seasonal Rental Trends in Coastal Locations
In coastal retirement destinations, rental demand can be highly seasonal. While this offers the opportunity for higher rental yields during peak seasons, it also means potential off-season vacancies. Investors need to factor in these fluctuations when considering potential rental income.
- Limited Market and Resale Challenges
Retirement properties typically cater to a specific age group, limiting the potential buyer pool. This can lead to challenges in reselling the property; some properties may even resell at a loss.
- Management Fees and Additional Costs
Retirement properties often come with high management fees and additional costs like ground rent and contingency fees. These ongoing costs can impact the overall profitability of the investment.
- Depreciation in Property Value
Unlike standard residential properties, retirement properties might not appreciate in value at the same rate. In some cases, they may even depreciate over time, affecting the return on investment.
- Regulations and Restrictions
There may be complex regulations and restrictions associated with retirement homes, including age restrictions for residents and clauses in the lease affecting resale.
- Changing Demographics and Demand
The demand for retirement properties can be influenced by changing demographics and shifting preferences of the older population, potentially affecting long-term investment viability.
Tips for Those Considering Investment in Retirement Property
The best place to retire in the UK will depend on a number of factors, and if a property investor is considering a retirement property, here are some things to keep in mind.
- Understand Unique Market Demographics
Retirement property investments cater to a specific demographic with unique needs, like accessibility, community activities and healthcare services. Investors must understand these needs and preferences to ensure their property appeals to potential retirees, aligning with trends like the increasing desire for properties that offer a blend of independence and community support.
- Consider the Location Carefully
Location is crucial in retirement property investment. Ideal locations are often in quieter, scenic areas that are still accessible to urban amenities, healthcare facilities and social venues. Coastal and countryside areas are popular, but proximity to family and essential services can also be a deciding factor for retirees.
- Factor in Ongoing Management and Service Costs
Retirement properties often come with higher ongoing management and service charges to maintain communal areas and provide added facilities like security, leisure activities and health services. These costs can impact the investment’s profitability, so careful financial planning and understanding these fees are essential.
- Legal and Regulatory Changes
The retirement property sector is subject to specific legal and regulatory requirements, including leasehold charges and age restrictions. Keeping abreast of changes in legislation or industry standards is vital to ensure compliance and assess the impact on the investment’s viability.
- Plan for Long-Term Trends and Sustainability
The best place to retire in the UK will vary depending on a number of factors. However, With an ageing population and evolving preferences, investors should consider long-term sustainability in their investment decisions. This includes the financial aspects and the environmental and social impact, such as building energy-efficient properties and creating communities that support retirees’ well-being.
Can you get a Mortgage for Retirement Property?
Securing a mortgage for a retirement property in the UK can be challenging due to age restrictions and income considerations set by lenders. However, retirement interest-only mortgages are becoming more available, allowing retirees to borrow based on their retirement income and property value.
Is Property the Best Investment for Retirement in the UK?
Unlike stocks and bonds, property offers tangible stability and has shown resilience even during market downturns. The physical nature of property can provide a sense of security, especially for retirees.
The performance of property investments varies widely, just like pensions. Therefore, the best investment for retirement will take into consideration an individual’s circumstances and financial goals.
Is Property a Good Income Source for Retirement?
UK property has historically provided solid returns, with values rising significantly over the past decade. Rental income offers an additional revenue stream, with net rental yields averaging around 5.2–7.4% after expenses.
Real estate tends to be more stable and less volatile over time compared to other investment classes. This can make it an attractive option for retirees seeking steady income and asset stability. However, real estate is less liquid compared to stocks or bonds. Selling a property can take longer, which might be crucial for retirees needing quicker access to funds.
Who is Eligible to Buy Retirement Property?
Most dedicated retirement properties in the UK have age restrictions, typically requiring at least one resident to be over a certain age, often 55 or 60 years. Buyers need to demonstrate they can afford the property. This includes the purchase price and ongoing costs like service charges, ground rent and potential contingency fees.
For properties like bungalows which are popular with retirees, anyone is eligible to buy the property as long as they have the financial means to do so.
The best place to retire UK depends on a number of factors. Investing in retirement properties offers a unique opportunity to provide quality homes tailored to the needs of retirees while securing a good return on investment. This sector presents a growing market due to demographic shifts and the UK’s ageing population. To learn more about investing in retirement property in the UK, contact our experts.