March 24, 2017

McCarthy without Stone: Churchill Retirement Living ‘to spend £500 million on new sites’

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ChurchillRetirement2Churchill 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.

Carlex Comment

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. 

Comments

  1. Michael Epstein says:

    With proper and stringent controls, the concept of retirement homes is a good one.
    However as Carlex has said, never again must the McCarthy and Stone, or Peverel business model ever be repeated. No management company should EVER be connected with the building company.
    Every resident should automatically become a shareholder in a right to manage company.
    Any loans given to a company building a retirement development should only have those loans granted against the value of the property and never against the value of future income streams.
    Residents have no problem with a developer making money, nor a managing agent making money.
    What they do have a problem with is when developer and managing agent combine to cheat them.
    The banks have already lost a fortune, if they go back to the practices that have been so ruthlessly exposed, they once again will lose a fortune.

  2. As a victim of the Churchill/Millstream machine, I was stunned to see them get a mention on Carlex, Is there a light shining through the wool held firmly over the eyes?

  3. I think the whole idea of mentioning McCarthy & Stone, Peverel etc is to warning people thinking of retirement Leasehold property as a safe place to live financially is a risky business. The one place people will look is on the internet when doing their due diligence and hopefully they will read the horror that can await them!

  4. Karen,

    I understand all that you say, I was referring specifically to Churchill and their Management company; Millstream. From my experience and others that I know, they are hardly whiter than white.

  5. Anna, agreed and hopefully the people that you speak to about the carlex and LKP sitse can also post a comment to ‘warn’ prospective buyers of whats in store. The more people that start talking about the abuses they have had to endure the better….

  6. Michael Epstein says:

    Which ever Freeholder or Managing agent it may be, if they are “Up to Something” they can only get away with it if they can avoid publicity. That is why sites such as Carlex are so important.

  7. Michael,
    I have not seen any major publicity in any newspaper that has mentioned Peverel handing them self into the OFT. I have not seen anything which has highlighted what has happened and find it very strange that the links between Peverel and Glyn Jackson and the others can only be sen on these websites???
    Chas

  8. Michael Epstein says:

    You are right Chas,
    Mention of the OFT investigation has only been put out on some of the Peverel Group websites. You would have thought a truly “contrite” company would have given more publicity to the price fixing scandal inviting those that thought they may have been affected to contact Peverel.
    Perhaps they are waiting for the next issue of Life &Style, so that the Cirrus price fixing knocks the story of a new pot plant in Blackburn of the front page!