May 23, 2017

Channel Four Dispatches exposes retirement leasehold

DispatchesUndercoverRetirementHome

Tonight’s Dispatches programme (September 24 2012) on retirement leasehold was a brilliant example of television journalism that was extremely critical of both McCarthy and Stone and Peverel.

Peverel’s LVT defeat at the hands of pensioners at Strand Court, Rye, received a wider airing (or search Strand Court on this site).

But the focus was an exposé of McCarthy and Stone, whose seemingly motherly sales force (“mother value” is the dubious term M&S uses) were revealed to be unreliable.

New buyers would have been appalled at the way the sales team coaxes them into a disadvantageous part-exchange sales process of their existing home.

Marion Bowley, in Weston super Mare, was offered £140,000 for her pleasant family house. But she sold it herself for £50,000 more after only two weeks on the market.

Then the Dispatches sent in an actress posing as the 79-yeat-old widow Mrs Grimsdale, who was pretending to sell a four-bedroom terraced house in Worthing to buy a one-bedroom flat at Cherrett Court, Bournemouth.

She was told by a sales woman that part-exchange was a ”god-send”, and assured that she would not get less than the market value. McCarthy and Stone use a third party to buy your house and then – seemingly generously – top the figure up, and discount the flat you are buying by a small amount.

Mrs Grimsdale discovered that she would be £65,000 better off selling her own house and buying a McCarthy and Stone flat for cash – the discount for a cash purchase being much better than the supposed discount for a part-exchange. And Mrs Grimsdale was told she had to make a decision in four days to ‘benefit’ from part-exchange.

As Baroness Gardner said, you needed to be a “mathematician” to understand it. “They are doing their very best to get the flats off their books as quickly as possible,” said solicitor Rachel Stafford.

The programme did not make the additional point that retirement leasehold flats are the worst performing residential asset in the entire property market. Carlex’s advice is: do not buy retirement leasehold at all. If you have to live in one, then rent instead.

McCarthy and Stone said: “Part exchange is only one of a number of options that we make available to our customers to facilitate their move. We take care to explain each option so customers can make an informed decision on what is right for them.”

McCarthy and Stone has profited the most from retirement leasehold and yet has curiously not been the focal point of most of the opprobrium.

Peverel is more widely disliked. The issues surrounding Strand Court, in Rye, were given a wider airing on Dispatches. Former squadron leader Eric Matthews, 94, humiliated Peverel and had the company pay back £11,500 for insurance and other contracts doled out to Peverel owned companies.

A clip reporting Eric Matthews’ victory at Strand Court, Rye, can be seen on the Channel Four website here

Peverel said in a statement that it “accepted the LVT decision”, which is very gracious of it.

Norman Greed, 82, showed that pensioners can organise a successful right to manage and slash the burden of their service charges. All retirement leasehold blocks should do the same.

Many congratulations to all who participated in the programme, and to the programme makers.