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The over 65s in Britain do not have the same opportunities to go out and socialise as the over 65s in South Africa. How can they tackle the loneliness epidemic?
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.
According to research conducted by Age UK, over 2 million people aged 75 of over live alone and more than a million go a month or more without talking to a family member, friend or neighbor. Can you imagine the effect that has on not only someone’s mental, but also physical wellbeing?
How loneliness can affect someone’s mental and physical wellbeing
According to AgeUK, 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.
It is well-documented that loneliness and a lack of social connection can be detrimental to someone’s mental wellbeing, and those who report feeling lonely are more likely to develop illnesses such as depression. It also has a negative effect on one’s physical health and has the same effect as smoking 15 cigarettes per day, furthermore it is even more harmful to health than physical activity or obesity.
The main causes of loneliness in the U.K are due to changes in living or personal circumstances. For example, when one retires they may not have the same level of daily interaction that they would have experienced with work colleagues. If their health declines 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 simply attend social events.
Finally, their family might live in another city and it might not be logistically possible for them to visit as often as they’d like. As people get older their network grows smaller as friends and partners pass away.
What solutions are there to the loneliness problem?
These are the types of people that may consider living in retirement homes because of the benefits it could bring. These homes would provide them 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).
Activities held include fine dining, wine tasting and outings with other residents to explore the local area. There are also a range of amenities onsite for those who prefer to stay in or for those with mobility problems. These amenities include hair and beauty salons, spas, private cinemas and rest areas.
Often, the retirement retreats are based in Victorian buildings or country houses that have been refurbished so they are fit for purpose to house elderly residents. These retirement developments are strategically located in areas where there is a high elderly population, meaning that they do not have to move to far from home, or transport themselves to an unfamiliar environment.
Retirement villages are commonplace in South Africa with the abundance of land and a flexible planning process in comparison to the U.K. The benefit of living in these sorts of communities is clear to UK residents, however restrictive planning permission prohibiting new development in these traditional countryside villages as well as greenbelt land protection limits the number of new retirement homes available.
Retirement communities are relatively recent phenomenon in the U.K. Recognising the demand, investor 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 potential investors trying to take advantage of the weak pound and looking for opportunities within the UK retirement market. Overall, Knight Frank has estimated that £20bn of overseas equity is set for investment in the sector, as people are drawn to the stable returns.
What makes retirement property a stable investment?
The returns are buoyed by Britain’s ageing population. As the largest generation, the “baby boomers” enter retirement, there is a high demand for this sort of accommodation. It is estimated by 2039 one in 12 will be over the age of 80, and in areas in the south west of England, those aged 65 or over could make up a third of the population.
This generation is in general relatively wealthy in terms of assets. Many own their own homes and have seen the value of those homes go up in value significantly over the years. In 2016 77% of those aged 65 or over owned their own home and with the phenomenal growth in house prices and the change in inheritance tax regulations, it is understandable that 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 £870million 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.
Opportunities within the retirement sector
One Touch Property connects South African investors with trusted developers within in the U.K 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 Lindor’s from R1.25m and receive a 10% return per annum throughout the ten-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 5 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 5 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 whilst receiving secure returns which are paid monthly.
For South Africans interested in luxury retirement investments in the UK, One Touch Property’s investment consultants will be hosting presentations in Simbithi to discuss the UK retirement property and student property investment sectors 20th of July. There are limited places, so book your spot today.
They will also be in Cape Town and Johannesburg conducting one to one consultations, contact them below to reserve a space at the presentation, or to book a one-to-one consultation at the other locations.
Tel: 010 300 1200
E-mail: [email protected]