The majority of properties managed by McCarthy & Stone have increased in value when resold (based on data relating to managed properties resold in 2016 to-date) and historical data suggests around a third of all our properties outperform their local market.
In addition, our newer properties are better-placed to retain value as a result of the improvements we have made, such as setting up our own management services team, providing more internal space, removing exit fees, introducing 999 year leases, and increasing car parking. We expect to see continued improvements to resale prices in the future because of these changes.
As is common in the housebuilding sector, we use various incentives to support people with the moving process.
This includes providing new carpets and curtains, paying moving costs such as stamp duty and legal fees as well as using part exchange.
For instance, of the apartments quoted in your article at Risingholme Court, incentives averaged £27,000 per unit, or c12% of their original sale value. These benefits go to the original purchaser and need to be considered when looking at the value of the original sale to the customer.
Obviously the values of these incentives are not there on resale. In addition, and again as is common in the new build sector, it is common for new housing to be sold at a premium, and this is estimated to be around 10-15% of existing properties of a similar type. It is the benefit associated with being the first person to own the property, and is experienced in other sectors such as buying a new car.
The value of retirement housing is also more than simply financial; it is about helping our customers to live healthier, happier and longer lives. Our customers recognise that they are buying into a lifestyle based around security, companionship and friendship, as well as access to many shared facilities and services, including our on-site support teams. This is why we have received the full Five Star rating for customer satisfaction from the HBF [House Builders’ Federation] for the eleventh consecutive year – making us the only UK housebuilder, of any size or type, to achieve this accolade.
The value of our properties is therefore found in how they help those in later life rather than the simple square footage of an apartment. Our properties provide an excellent alternative to struggling on in large unsuitable family-sized properties that are difficult to maintain, expensive to heat and can be detrimental to well-being in later life. The only other choice can be moving to a care home, which can be hugely expensive and is often seen as a last resort.
In the last five years, we have focused on ways to further improve our developments to benefit our homeowners. This includes increasing space standards as well as providing better designs, more en-suites, underfloor heating, walk-in wardrobes, level-access showers and enhanced kitchens, as well as increasing the number of parking spaces.
We have also improved our leases and how we deliver our services.
We have removed exit fees and provide our services at cost with no commission.
In 2015, we lengthened the terms of our new leases from 125 years to 999 years. We established our own in-house management companies in 2010 to manage all new schemes, which has helped maintain the quality of our developments and ensured they are well looked after. This has also avoided the need to employ third parties and allowed us to provide a holistic service and single point of contact for our customers from the point of sale.
The marketing of retirement apartments can be complicated given the specialist nature of the properties, and we do recognise that prices can fall. In our experience, local estate agencies are not always able to fully demonstrate the benefits of the retirement living lifestyle to new purchasers in the way we do and are therefore not always able to price or market them appropriately.
It is a unique form of housing that requires a level of expertise to explain the full benefits and characteristics of the development, as well as a consistent focus. For instance, up to 35% of our floorspace in each development is provided as shared and communal facilities, such as lounges, restaurants, laundries and guest suites, and this forms part of the value of the original sale to the customer. However, we know that high street estate agents often fail to show people these facilities upon resale. Our apartments meet a very real need for better housing for our ageing population and provide an attractive and enjoyable option for many people, and this needs to be communicated during the resale process.
To help address this challenge, we have established a relationship with Retirementmove, a specialist in retirement property resales. Retirementmove is able to provide a proactive estate agency service and has an expert team in place that fully understands this type of accommodation. Retirementmove has a solid understanding of the benefits associated with our apartments and our customers’ lifestyle, and is well-placed to offer a good service to our homeowners. We also provide information about this service in our new sales suites and developments so customers know they are supported from the outset if they need to sell their property.
In many instances, apartments can be offered back to the market by the seller or their family in a poor state of decoration or repair. In our managed schemes, and where Retirementmove are employed, we can advise on how apartments can be best presented. This is not always possible in older developments.
Examples of price increases:
Original new sale price and date (and not including additional incentive costs to us)
Resale price and date
Eadhelm Court, Edenbridge, TN8 5FD
£249,950 (30 March 2012)
£280,000 (29 March 2016)
Holmes Place, Crowborough, TN6 2RS
£175,776 (13 Feb 2015)
£263,950 (16 May 2016)
£175,776 (12 Feb 2015)
£275,000 (12 Feb 2016)
£175,776 (13 Feb 2015)
£255,000 (10 Dec 2015)
Wellington Court, Waterloo Road, KT19 8EX
£218,210 (26 Feb 2014)
£374,950 (17 Jul 2015)
£188,110 (26 Feb 2014)
£249,950 (16 May 2014)
Cabot Court, Bath Road, Bristol, BS30 9BR
£260,000 (7 Apr 2011)
£290,000 (6 Oct 2015)
£186,950 (16 May 2011)
£220,000 (24 Jul 2015
Peel Court, College Way, Welwyn Garden City, AL8 6DG
£280,650 ( 20 Dec 2013)
£330,000 (22 Mar 2016)
£263,000 (16 Jan 2015)
£285,000 (27 Nov 2015)
Jowett Court, Idle, Bradford, BD10 8DF
£124,950 (25 May 2012)
£131,500 (26 Aug 16)
Roswell Court, 8 Douglas Avenue, Exmouth EX8 2FA
£321,950 (27 Jun 2013)
£335,000 (18 Nov 2015)
£264,950 (23 Jun 2013)
£270,000 (9 Apr 2015)
Finally, we have always engaged with Carlex when asked for information.
We note that this article, and many others, were published without any opportunity for us to comment beforehand. [McCarthy and Stone has been asked to substantiate this assertion, Carlex.]
We struggle to see how the case studies included in the article on resale prices were chosen at random given the points made above, and they seem to have been included to provide a deliberate slant.
We note that of the c1,100 developments that could have been chosen, two of the three examples were built just prior to the financial and house price crash of 2008, making measurement of their performance difficult. We are also aware that some of the apartments you highlighted have title restrictions that may have impacted their stated resale price.
Finally, we have listened to Carlex’s campaigning and engaged and responded accordingly.
In recent years, and as noted, we have moved to 999 year leases on all new developments, removed exit fees and introduced our own management services to customers, and our level of customer satisfaction is among the highest in the housebuilding industry.
We genuinely believe that we now offer a service that significantly enhances later life and offers a competitive financial return when compared to the alternatives that are facing many of our customers.
We can provide any number of homeowners across the country who speak glowingly of how moving into one of our developments has enriched their and their families’ lives.
Despite this, we note that your website continues to focus on the minority of negative cases, rather than providing a more balanced picture and highlighting all the work that has been undertaken to enhance value for our customers and further improve standards across the sector.
We’re happy to help you portray this more balanced picture if that’s a direction you wish to pursue.