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We are very lucky in South Africa, where there is a huge choice of retirement communities with lots of open space, great facilities and interesting activities.
These places are specially designed to mitigate the inevitable loneliness that comes to survivors as they age and their friends, spouse or partner dies. But this is not the case in Britain, where older people may not have the same opportunities to go out and socialise.
Loneliness is endemic
Older people in the UK are especially susceptible to loneliness and isolation. The weather and usual living arrangements are not ideal for encouraging the elderly to go out and socialise, as it is not often warm, and family members may live far away. Of course, the distances may not seem excessive to us, but Britons have a different concept of space, and a drive of 25 miles (about 40 kilometres) is considered quite an expedition. According to research conducted by Age UK, over two million people aged 75 or over live alone, and more than a million go a month or more without talking to a family member, friend or neighbour. Can you imagine the effect that has on not only someone’s mental, but also physical wellbeing?
According to Age UK, nearly half of those aged 65 and over state the television, or pets, as being their main form of company, and 17% are in contact with their family, friends or neighbours less than once a week.
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How did this happen?
The main causes of loneliness in the UK are due to changes in living or personal circumstances. For example, when people retire, they may not have the same level of daily interaction that they would have experienced with work colleagues. If their health declines as well, and they are not as mobile as they used to be, they may find it difficult to get out of the house and visit relatives or even attend social events.
And, of course, it’s not uncommon that people move around for work, so older people are quite likely to not be living in the same city as their children and other family members. It may be logistically difficult for them to visit as often as they’d like. This is exacerbated by the fact that as people get older their network grows smaller as friends and partners pass away.
The real effects of loneliness
It is well documented that loneliness and a lack of social contact can be detrimental to mental wellbeing, and people who report feeling lonely are more likely to develop illnesses such as depression. It also has a negative effect on one’s physical health – equal to smoking 15 cigarettes per day – and it’s considered to be even more harmful than physical inactivity or obesity. And loneliness often exacerbates these conditions anyhow, as it’s hard to motivate oneself to exercise alone, and loneliness and comfort eating are long-term bosom buddies.
OK, it’s a problem, but is there a solution?
It may seem obvious to us, living in South Africa where retirement villages are commonplace. But that’s because, in comparison to the UK, we have an abundance of land for development, and a flexible planning process. So, while the benefit of living in these communities is clear to UK residents, restrictive planning permission limits the number of new retirement homes available. Many retirement facilities are developed in existing buildings – often stately homes or other large historical buildings.
These homes can provide isolated and lonely elderly people with the opportunity to socialise with other residents, forge new friendships, and receive care if they need it (even if it is just help getting ready in the morning). These developments usually include activities like fine dining, wine tasting and outings with other residents to explore the local area. There are also a range of amenities on site for people who prefer to stay in, or who have mobility problems. These amenities include hair and beauty salons, spas, private cinemas and rest areas.
These retirement developments are strategically located in areas where there is already a significant population of elderly people, so they would not have to move too far from home, or transport themselves to an unfamiliar environment.
Is it just a solution, or is it an opportunity, too?
Retirement communities are a relatively recent phenomenon in the UK. Recognising the demand, interest in the sector has swelled over the years. Since the UK voted for Brexit, Chinese insurers and Singaporean wealth funds are just a few of the investors trying to take advantage of the weak pound and looking for opportunities within the UK retirement market. Overall, Knight Frank has estimated that £20 billion of overseas equity is set for investment in the sector, as people are drawn to the stable returns.
The returns are buoyed by Britain’s ageing population. As the baby boomers enter retirement, there is a high demand for this sort of accommodation. It is estimated that, by 2039, one in 12 people in the UK will be over the age of 80, and in areas in the southwest of England, those aged 65 or over could make up a third of the population.
This generation is generally relatively wealthy in terms of assets. Many own their own homes, and have seen the value of those homes go up significantly over the years. In 2016, 77% of people aged 65 or over owned their own home. With the phenomenal growth in house prices and the change in inheritance tax regulations, many of them want to downsize to release equity. According to the Equity Release Council, the number of homeowners using equity release has doubled in five years and freed up £870 million of housing wealth in the first quarter of 2018. The increased prevalence of those wanting to release equity and downsize, coupled with the ability to afford retirement resort rental fees provides good demand for retirement property.
Make it happen
One Touch Property connects South African investors with trusted developers within the UK retirement sector. Retirement homes provide stable returns that are underpinned by the aging population in areas where there are high numbers of elderly people, meaning that there will be excellent levels of demand. These investment opportunities are ideal for South African investors because the retirement homes are operated by an experienced management company, meaning that investors do not have to oversee the day- to-day running of the property.
Investors can buy a luxury suite in a retirement home such as Lindors from R1.25 million and receive a 10% return per annum throughout the 10-year lease period. They will have the legal title deeds. If the investor’s circumstances change, and they urgently need to exit the investment, they can sell at any time. There are also several buy-back options from year five onwards, providing another opportunity to exit with increasing amounts of capital uplift over time. For instance, the developer will buy the unit back in year five for 110%. Incremental exits are available all the way through to year 10 at 125%.
This is an excellent opportunity for South Africans to help combat the loneliness epidemic in the UK, as well as safeguard their savings in a politically stable country while receiving secure returns that are paid monthly.
For South Africans interested in luxury retirement investments in the UK, One Touch Property’s investment consultants will be in various cities in South Africa from 17 to 27 July to meet with potential investors. There are limited places, so book your spot today. Get in touch with us using the contact details below to reserve your space.
Tel: 010 300 1200 (JHB)
enquire@onetouchinvestment.co.uk
www.onetouchinvestment.co.uk
