Churchill Retirement Living, the retirement leasehold developer controlled by the McCarthy family who built up McCarthy and Stone, is spending £500 million on new sites over the next three years, says the Times.
In what appears to be a re-write of a press release, the article echoes the company’s message that the retirement leasehold sector is booming.
Staff numbers have increased 20 per cent to 306 in the past year – that’s the past year when McCarthy and Stone reported that only 1,600 retirement leasehold units were built.
Churchill bought 18 sites last year, the report says.
Churchill’s latest results showed that turnover jumped by 12.7 per cent to £61.3 million in the year to May 31, while its underlying pre-tax profit rose to £12.2 million from £7.3 million in 2012.
“There is a growing need for more retirement living in the UK. A third of British households are now headed by someone over 65 and demand for housing geared towards older people far exceeds supply,” Spencer McCarthy, the chairman and managing director of Churchill Retirement Living is quoted as saying.
“We are seeing exciting opportunities opening up nationwide, with the number and quality of land-buying opportunities under consideration at an unprecedented level.”
The business model for Churchill Retirement Living appears to be the same as McCarthy and Stone in the 1980s and 1990s. The sites are owned by Churchill Retirement Living and managed by its own management company Millstream.
McCarthy and Stone was built up by John McCarthy, Spencer’s father, and sold in 2006 in a £1.1 billion deal orchestrated by disgraced HBOS banker Peter Cummings. He is banned for life from practising as a banker.
The consequences of this deal are still being felt by taxpayers: McCarthy and Stone remains heavily indebted to HBOS.
It would appear that banks are lending to retirement housebuilders again. It would be tragic if the whole grisly jamboree of retirement leasehold, as practised over the past 25 years, is perpetuated as a result.
Carlex supports a healthy sustainable retirement housing market, where housebuilders build and sell and then … go away!
Ideally, we would like the flats to be built as commonhold, with no outside management companies. Or, if they have to be built as leasehold, with a residents’ management company included from the outset.
The old ways of retirement housing won’t work in a more informed era. And the market, banks should note, is static not solely as a result of a stalled wider housing market, but because confidence in retirement leasehold has understandably evaporated.