Retirement developer creates ‘first of its kind’ transparent tenure

AXA IM Alts-backed developer Retirement Villages Group has created a “first of its kind” contract model for the private retirement living sector, to provide a more transparent and affordable leasing structure. Under the tenure, which it will offer at its Thrive Living scheme in Chester when it opens this year, residents will stop paying management fees when they leave and receive a pre-agreed sum of money for their home on re-sale. Residents will pay weekly management fees that are subsidised with a deferred fee, which is a proportion of the property value and intended for amenity and environment upkeep. That sum is paid when they leave the property. The weekly fees stop two months after the residents leave, so that the liability is removed from the homeowner, their family or their estate to continue paying them. The contract will guarantee repayment of the initial purchase price, minus the deferred fee, at exit. The model was designed to address customer feedback, which called for no hidden fees, affordability, simplicity, and clarity over what money is back with the homeowner after departure. RVG cited research published by the Associated Retirement Community Operators showing that, when asked to consider moving into retirement housing, 90% of older people are concerned about possible hidden fees and charges. The first of RVG’s Thrive Living-branded communities will open to new residents in Chester (The Wyldewoods) in November this year; and in West Byfleet (Botanical Place) in early 2025. This will be followed by a site in Tunbridge Wells in 2026. Michael Voges, chief executive of ARCO, said: “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.”