Gavin Barwell urged greater transparency over retirement exit fees as the Leasehold Advisory Service “annual conference” yesterday.
“More than one in 12 people in the UK will be aged over 80 by 2039, according to the National Office for Statistics.
“The UK’s population is set to rise by over 4 million in the next decade, and by 10 million in 25 years – driven in part by an increasingly expanding older population.
“So it is important that there is greater transparency around ‘event fees’ charged in the retirement leasehold sector that can help to defer service charges so older people can ‘enjoy now and pay later’.
“Fees apply when an older person sells or sublets their property, which can affect older people at a vulnerable time in their lives. That’s why we asked the Law Commission to undertake a wide-ranging review of event fees.
“The Law Commission is preparing to publish its final recommendations by April 2017.
“This will promote greater transparency over the disclosure of event fees at the point of sale and remedies for consumers where landlords, or their agents, fail to disclose event fee information.
“Greater transparency over the use of event fees will make a significant difference in helping to re-establish confidence in the residential retirement leasehold sector and release the current stalling on new supply in this sector.
“However, we can always do more and I am very keen to explore how we can promote greater transparency, fairness and efficiency, and to work with consumers and the sector to improve leaseholders’ experience of home ownership.
Sebastian O’Kelly, of LKP, asked a question of the minister from the floor:
“Minister, are you aware that the retirement exit fees can be extremely complicated.
“I’m dealing with a case at the moment of a widow in an upmarket retirement who has run out of money.
“But the exit fees amount to £72,500, so she can’t afford to move and she can’t afford to stay. I have exhausted looked over the website of the housebuilder concerned, and there is no reference to these exit fees at all.
“If you want a healthy retirement housing market, I think you are really going to have to nobble issues like this.”
Mr Barwell replied:
“The fundamental principle of exit fees works for many people: they go into a nice environment that they may not be able to afford in income terms, yet pay later at the end.
“But it has to be absolutely clear on what terms they are entering.
“The Law Commission has been very useful in working up our ideas in this area, and we look forward to its report in April.”