April 28, 2017

The Times: ‘Exit fees and poor resale values: the uncomfortable truth about retirement homes’

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thetimessept102016The Times today (September 10 2016) reports the research by Carlex into re-sale values recorded on the Land Registry for retirement properties.

The article, headed “Exit fees and poor resale values: the uncomfortable truth about retirement homes”, quotes Carlex / LKP patron Sir Peter Bottomley, who earlier this week established the All Party Parliamentary Group on leasehold and commonhold, saying:

“People who buy retirement properties should expect that they will hold their value; too often this is not the case.”

Carlex looked at the resale prices paid at a random selection of sites by providers McCarthy and Stone, Churchill Retirement Living, Audley, Retirement Villages, Retirement Security, Anchor and Pegasus.

It reported a fall in value of £164,188 of a McCarthy and Stone flat at Risingholme Court, in Heathfield, East Sussex, from its original purchase price of £225,688 in April 2008.

The resale price was £61,500.

Carlex has asked both McCarthy and Stone and Churchill Retirement Living for data that demonstrates price increases at sites constructed between 2000 and 2014.

Comments

  1. chas says

    September 11, 2016 at 7:24 pm

    The Times September 10 2016, reported, research by Carlex into re-sale values.

    The article, headed “Exit Fees – Poor Resale Values:

    I recently posted similar information regarding a McCarthy & Stone Development built 2005/06. A One Bed Flat was selling circa £135k in 2006, Two Bed Flats for £180K.

    Recently in early spring 3 One Bed Flats were on sale in the same development, for offers circa £75k? What is strange, soon after the posting, I was informed by an Estate Agent the three One Bed Flats I had mentioned had over night, increased to £109k each and later sold. I asked at the time was this a conspiracy as the 3 flats increased 31% each.

    The Freeholder is now Fairhold 7, purchasing 56 flats within a short period after completion. The Landlord is Estates & Management, with Managing Agents, Peverel/Firstport Retirement. Those elderly pensioners purchasing the flats, are unaware of drops in value.

    The flats that lost most value:- have Lifts, Communal Rooms, Laundry’s and Corridors with Stairs. It seems the flats original purchase costs, includes the above addition items, which are not part of the re-sale.

    Don’t forget the original value would have been used as a valuation for re-mortgaging. What would this development be worth now?

    • I have re-checked at the local development and some of the information I was provided, needs adjusting.

      1. The development was built in 2003/04 not 2005/06
      2. The most expensive flat was sold for over £188k not £180k

      Flat 40 One Bed
      Purchased for £130k – 2005.
      Sold for £62k – 2010

      Flat 47 One Bed
      Purchased for £129k – 2007
      Sold £75K – 2014

      Flat 24 Two Bed
      Purchased for £187k – 2004
      Sold £125k – 2011

      Cheapest 1 Bed Flat – sold new 2003 – £95k.
      Dearest 2 Bed Flat – sold new 2004 – £187k.

      Information from the Internet

    • Michael remember:

      McCarthy & Stone (M&S) in a damming programme in 2012, was not the first time they were rumbled regarding unfair charges at their own developments. On 24/09/12 almost 4 years ago a Chanel 4 Dispatches Program on Retirement Leasehold exposed McCarthy & Stone. This was a brilliant example of television journalism that was extremely critical of both McCarthy & Stone and Peverel. The defeat at the LVT at the hands of pensioners at Strand Court, Rye can be read on CARLEX Website.

      The focus was an exposé of McCarthy & 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 £190,000 some £50,000 more, after only two weeks on the market.

      In 1989 a damming article about McCarthy & Stone regarding excessive inflated Service Charges in England. Comments from residents spoke about excessive and misleading sums for the Service Charges.

      1991 M&S launched High Court action against Daily Telegraph, claiming £800,000 damages over many articles regarding excessive service charges.

      1993 M&S sold Peverel as they were perceived as a potential conflict of interest.

      After the first article appeared, there was a crisis management meeting attended by Nigel Bannister head of Peverel, (now director at a similar Peverel Company, Freemont) Others involved including Head of Age Concern Sally Greengross, who had referred in the House of Lords to us pensioners as “barrack-room lawyers” with too much time on our hands.

      More critical articles against M&S by the Daily Telegraph continued. In 1991 M&S launching a libel action against the Daily Telegraph. Suddenly during the court case the High Court learned that M&S had just been fined £2,000 by the OFT for misleading sales literature. M&S had spent £200,000 on lawyers, decide to walk away, therefore loosing their Libel Case.

      1993 the perceived conflict along with the loss of the court case and the fine for misleading sales literature resulted in the sale of Peverel for £30 million as part of a Management Buyout. This was managed by Electra Investments. Strangely Electra Investments, along with Chamonix, later purchased Peverel out of administrators in 2012 for £50 million.

      M&S now own Churchill Retirement Living, run by family members. M&S are attempting to resurrect the company having recently removed all Peverel Managing Agents from portfolios.