March 23, 2017

Oldies should downsize and give retirement house builders lots of money, reports Telegraph

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TelegraphdownsizeThe Daily Telegraph has repeated a load of retirement house builder propaganda in a story about oldies downsizing.

Story link is here

It is basically a re-hash of the 2013 report by the think tank Demos, called The Top of the Ladder – which was paid for by the House Builders’ Federation on behalf of its retirement house builder members.

The article was prompted by a letter to the Telegraph pointing out the benefits of downsizing.

These certainly do exist, but retirement house builders are the last people to crow about them.

McCarthy and Stone pioneered sneaky revenue earning leases to bump up the values of its freeholds, which it subsequently flogged off, gave birth to the monster that became Peverel.

(Which, lest anyone forget, systematically cheated thousands of its elderly residents through its subsidiary Cirrus running a price fixing racket, the Office of Fair Trading ruled in December 2013.)

This time the retirement house builders – and insurance companies and other self-interested parties – want stamp duty exemptions and government back loans to prop up the ailing retirement housing model.

Both should be rejected. Most older people downsize to smaller properties that are not designated retirement flats and they are quite right to do so.

This is far more likely to be a fairly managed property whose value will track the local housing market … whereas specified retirement flats can plummet in value on re-sale.

Carlex has written the following to the Telegraph’s Letters page:

Dear Editor, The Daily Telegraph

Oldie homeowners should certainly not be bullied out of their family homes by a grisly collection of retirement house builders, insurance companies and assorted self-interested others.

Nor should taxpayers pay a penny to “encourage people to downsize” through stamp duty exemptions or, still less, government-backed loans.

Elderly homeowners are quite capable of doing this themselves, when they choose and without incurring debt.

Far more important is to start dealing with the scandals in retirement leasehold housing: the subject of two Office of Fair Trading investigations – one finding of industrial-scale cheating through collusive tendering – court cases and parliamentary debates.

Those wanting to downsize are quite right to be wary of these overpriced purchases, whose plummeting re-sale values bear no resemblance to the local housing market.

That’s on top of revenue-generating leases and unjustifiable fees for property management.

Until this sector is sorted out, oldies would be well advised to stay put in their blameless freehold family homes.

Yours Sebastian O’Kelly
Campaign Against Retirement Leasehold Exploitation

Comments

  1. Michael Epstein says:

    Doesn’t it go to show that Peter Oborne was right to resign from the Telegraph, over “conflict of advertiser interest” over good old fashioned journalism?
    Perhaps the Telegraph would like to quantify their earnings from Mcarthy & Stone/Churchill etc?

  2. Michael Hollands says:

    It’s all very well advising the elderly to downsize to Retirement Complexes but the brand new ones cost way above what the average pensioner can afford.
    The average house price in our area is £184000, little chance of getting a new one bed apartment for that, let alone a two bed.
    Then there is the problem of instant depreciation and exit fees if one has to move out.
    So my advice to the builders of these properties is to reduce the price (even if it means a reduced spec), remove exit fees and reduce ground rent charges. And longer leases that do not have to be renewed at an exhorbitant cost.
    Then they might sell like hot cakes.

  3. I have commented before on the depreciation of McCarthy & Stone ex development’s.

    In Church Stretton a one bed flat was sold Brand New in 2004/05 for circa £138,000, a similar flat on the same floor was sold for £75,000 this was not the first sale for this amount.

    The value for resale is very poor and expensive as the residents also pay over £9,000.00 rent for the House Managers Flat who recently left under a cloud and had been off sick for most of last year.

    The rent is still paid by the residents.

    The 1% Exit Fee may be charged on the Original Purchase Price that being £1,350.00, leaving the kids to pick up just over half of the original cost.

  4. Michael Epstein says:

    If anyone should have a subsidy, it is those poor souls that believed the dream they were being sold by retirement development builders and are now sitting on huge losses.
    Many elderly people have planned to use equity release in their properties to finance their lifestyle.
    Just try getting an equity release plan for a retirement property!

    • The reason that the elderly are treated so badly is that Government have chosen them as sacrificial lambs that only become an important issue around a General Elections.

      The Conservatives and Labour have retreated when they realise that so many of the MPs and Lords have a finger in the Freehold Pie?

      My Aunt may loose around £65,000 on the sale of her one bed flat?

      Where else in the Housing Market has there been a loss other than ex McCarthy & Stone Developments built after 2002.

      • AMEN to that statement Chas, we paid £235,000 for our two bed flat and according to several estate agents we would be LUCKY to get £160,000-£170,000 for it, (lemme out of ere)

      • OOPS That should have been we paid £235,000 and we have been advised it would sell for only £160,000-£170,000 This place would drive any one around the twist.

  5. Sir, I bought a one bedroomed mccarthy&stone apt in st helens in 2007, an elderly lady bought a 2 bed apt shortly after me in 2008 she subsequently died and the property was left to her family. She paid £230,000 for the property in 2008 her family sold it for £80000 this has got to be unprecedented but it is true, yes a loss of £155000

    • David,

      This is a tremendous loss and I note it was a McCarthy & Stone development.

      Why not complete the comments and ask Sebastian to carry a storey regarding McCarthy & Stone?

      Sebastian has my email address.