They demand the protections of variable service charges under LAFRA
Audley Retirement admits that capital projects have been deferred ahead of its merger with high-end Elysian Residences, and ‘we are now planning our capital expenditure programme for 2026 and beyond’
Audley Retirement agrees that there should be ‘appropriate recourse in the event that services are not delivered to a standard agreed between owners and managers’ at retirement community sites
Its trade body the Association of Retirement Community Operators is apparently in discussion with government officials over precisely this issue, it is claimed
Leaseholders in upmarket retirement flats run by the Audley Retirement are mutinying over what they claim are inflated service charges and declining standards.
Some leaseholders, whose average age is 83, claim that service charges have increased by 33.8%.
They say the money is being used to prop up Audley, where sales of new flats – typically priced around £500,000 – are claimed to have diminished, rather than providing the promised services at its 21 sites across the country that are home to 2,500 residents.
Audley has denied this in a five-page response sent to LKP (below).
However, it has acknowledged that capital projects were deferred in preparation for its merger with luxury retirement operator Elysian Residences last year.
Audley says that its service charges rise in aligment with either RPI or the Average Weekly Earnings index, as set out in the leases.
“We have never issued an unexpected bill to any of our customers for major works, emergency repairs, cost overruns etc and we are able to offer lower monthly fees to ‘asset rich, cash poor’ older people,” Nick Sanderson, Audley CEO, tells LKP (written statement below).
Nonetheless, the leaseholders have raised their concerns with housing minister Matthew Pennycook and, they claim, 13 MPs. Last week Audley representatives met Lord Truscott, the non-aligned co-chair of the All Party Parliamentary Group on leasehold and commonhold reform. Further meetings with MPs are planned.
In one email to Mr Pennycook, the leaseholders have claimed that “trust has been betrayed, because Audley is no longer able to meet either its service levels, or its financial obligations”.
The pensioners are publicly speaking out because they cannot challenge the service charges in the property tribunal like other leaseholders.
The monthly management charges are not variable service charges: they are effectively a leap of faith in the retirement community operator to deliver what it has promised. The only recourse would be a civil action for breach of contract if specified services were not provided.
The monthly charges are supposedly kept relatively low – rising with inflation and staff costs – but when the flat is sold an additional exit fee is charged – more delicately termed a ‘deferred management fee’ – which is also for no defined services.
These are a percentage of sale price rising to 15% after 15 years of occupancy at Audley sites. Other retirement community operators have higher percentages.
In return, the site operator pays up for all the shortfalls, such as major works bills.
The retirement community operator business model appeals to asset rich and cash poor retirees.
Audley offers a variety of services – restaurant, gym, pool and even care provision – typically clustered around a period country house.
The business model here is long term care and management, in contrast to housebuilder companies such as McCarthy and Stone and Churchill Retirement, which sell off new independent living leasehold flats at a premium, which pre the ban in 2022 included high ground rents of around £500. Until the practice was stopped in new leases in 2012 after an investigation by the defunct Office of Fair Trading, the leases could also include a 1% exit fee paid to the freeholder for nothing at all. The income streams in ‘independent living’ leasehold retirement flats made the freeholds attractive to financiers such as Vincent Tchenguiz, who owns the older McCarthy and Stone freehold portfolio.
Around 60,000 older people live in retirement communities, while a far larger number, around 250,000, live in retirement independent living flats.
The Audley leaseholders responded to last autumn’s government consultation “Strengthening Leaseholder Protections”, in which they argued forcibly that leaseholders in integrated retirement communities should enjoy the protections of Leasehold and Freehold Reform Act 2024 and its secondary legislation.
On the other hand, a variable service charge regime is precisely what the Audley leaseholders chose to forgo when they signed the leases, with legal advice, that allowed fixed management charges.
Meanwhile, Audley’s trade body the Association of Retirement Community Operators is continuing to lobby government to exclude integrated retirement communities from the protection of the Act.
The ideal form of tenure, in ARCO’s view, is a licence to occupy, along the lines of the New Zealand and Australian retirement communities, which is more akin to club membership than a property purchase. It is not altogether clear to LKP how residents would be better protected under such a regime, especially as ARCO operators clearly prefer to have services as undefined as possible.
However, ARCO has voiced strong criticism of the high ground rents in retirement housing and deprecated the sectors’ many abuses, including appalling resale values.
Audley has existed for 30 years, beginning in Tunbridge Wells, and runs a mid-market provider Mayfield. In July last year it merged with luxury retirement provider Elysian Residences, which has a portfolio of 11 retirement villages in London and the South East, with a total sales value of over £1.3bn
It says that its business model “is distinguished by its focus on the development and long-term
operation of our schemes, together with the retention of a direct financial stake in their success”.
Retirement flats are notorious for their catastrophic resale values, but Audley claims that 80% of its 452 resales over the past five years were for higher sums than the original purchase price.
In its statement (in full, below, at point 1) Audley did not acknowledge the leaseholders’ claimed 33.8% annual increase in management charges, but said that costs have “significantly increased” owing to staff National Insurance and National Minimum Wage increases, coupled with energy price rises.
“Our mechanism for increasing costs is clearly identified in our leases and would have been a central consideration for solicitors advising our purchasers,” Audley says. “In addition, it is prominent in pre-contractual information provided to our customers well before a commitment is made to buy or rent, as the ARCO Consumer Code requires.”
However, it adds:
“It is correct that we do not produce details of the actual costs of operating our villages as that is not a direct interest for owners given the charge increase is determined by independent indices specified in the lease.”
The Audley offer removes buyers concerns about “unknown or unpredicted cost increases as would have applied had we adopted a Service Charge and Sinking Fund model”, the company claims.
Mr Sanderson says: “I want to underline that never, in Audley’s 30-year history, have we charged leaseholders for unexpected repairs, maintenance or other emergencies that would have led to additional bills issued under a traditional variable service charge model and which, as you know from the campaigning work of LKP, have caused such problems in other parts of the housing sector.”
This is one of the principal reassurances of the Audley and the wider ARCO business model.
“Nevertheless, we acknowledge that during the last 12 months, certain capital projects have been deferred ahead of the merger of Audley with Elysian Residences and the finalising of the financial arrangements of the merged company,” Mr Sanderson explains. “That process will be completed imminently, and we are now planning our capital expenditure programme for 2026 and beyond.”
Unlike service charges, the management charges at Audley are not for specified services stated in the lease.
Mr Sanderson explains: “It is correct that our income from both monthly and Deferred Charges is pooled for collective use.”
If there is any excess in the management charges the lease itself states that the “Management Company shall be free to deal with such excess as it sees fit and shall not be required to retain the whole or any part of it or account to the Landlord the Tenant or to the tenants or occupiers of the Dwellings in respect of it”.
Mr Sanderson rejected an argument put forward by the Audley leaseholders that charges must be “expended in a specific year for specific purposes”.
Audley dismissed the argument that management charges have been used to bolster Audley during a period of faltering sales by stating that “since 2019 we have been developing new sites in joint ventures with major UK institutional investors, meaning that sales are accounted for outside of Audley Group”.
While LKP pointed out that Audley ground rents – which are also for no specified services – were around £500, creating new ones have been banned since the 2022 Act and Audley did not argue for retirement properties to be exempt, unlike both McCarthy and Stone and Churchill Retirement.
In common with other housebuilders, Audley does recommend conveyancing solicitors to buyers – a practice LKP has long deprecated as the lawyers risk being stooges in the sales process – but they “operate independently and provide personalised advice”.
“I am also fully supportive of the view that protection for those who live in the villages operating under that model should have appropriate recourse in the event that services are not delivered to a standard agreed between owners and managers,” Mr Sanderson says.
“This is something we and our colleagues at ARCO will continue to progress and promote with Government officials.
“As you will know, ARCO was founded by its members in recognition of the lack of regulation and legislation for the retirement housing sector in the UK, and to address the negative outcomes this was producing for customers and their families (LKP and BetterRetirement Housing have of course been instrumental in documenting these issues and pressing for change). More work is required in this area.”
Unfortunately, Mr Sanderson did not elaborate on what protections might result from further deliberation by ARCO.
LKP has broadly welcomed the ARCO / retirement community operators long term business model compared with leasehold retirement housing. We particularlY welcome operators like the Extra Care Charitable Trust, an ARCO member, which buys back its flats at 95% of the initial purchase price, which secures resale values and allows families quickly to move on.
Some families have been burdened with retirement flats by other providers that have plummeted in value since new and remained unsold for years: this is a particular issue with shared ownership properties.
On the other hand, LKP has been contacted by sites run by an ARCO provider where capital expenditure has been unexpectedly high resulting in appeal to leaseholders to agree a massive hike in the exit fees: which have shot up to more than 20% in at least one site.
If these retirement community operators run out of money, it is no great surprise who ends up being asked to make up the shortfall. In such a scenario, residents also have to balance the efficacy of litigating against the site owning company: if it becomes unviable, the quality of life of the residents is hardly likely to improve.
It is for these reasons that LKP has always regarded purchases of properties in highly managed retirement communities as a leap of faith in the provider – several of which are charities.
There is scope, however, in defining the services offered as comprehensively as possible: so that if they deteriorate or cease, the charges can come off the bill.
A final point, in fairness to Audley, is that its leaseholders have linked up with each other effectively thanks to the company’s own residents’ forums, which includes a representative body of all the sites in the country. In other words, Audley has made it easy for the leaseholders to communicate with each other.
In most blocks of non-retirement flats, of course, the freeholder’s appointed managing agents go to considerable effort to frustrate efforts by leaseholders to communicate with each other, form residents’ associations or organise collective action, such as right to manage.
After all, it is when leaseholders act collectively, that they can be most effective against their landlord.
The full statement from Audley Retirement can be read here:
https://www.leaseholdknowledge.com/wp-content/uploads/2026/02/FINAL-LKP-Sebastian-2.pdf
Related posts:
My granny’s Audley Retirement home ‘was a money pit’ costing £48,000 in exit fees
We need retirement ground rent gaming like a hole in the head, say retirement community operators
APPG July 11: Retirement event fees ‘align interests of buyers and operators’, Michael Voges tells meeting
APPG July 11: Retirement fees whether ground rents or event fees need to be for defined services not open-ended profits, says AgeUK
Still hope for zero ground rents, says Brokenshire. Please end them for retirement too, says LKP
Sort out enfranchisement, or existing leaseholders will be left behind in the commonhold future
Surely the sensible business model is this: the flats are sold at a lower price on leases for life. When the resident leaves or dies, the flat returns to the freeholder.
This gives the freeholder a strong reason to keep the estate well maintained and to keep service charges fair. It also removes all the usual problems around resale prices.
Once the development is complete, the freehold itself will be more valuable and will attract a different type of investor. That increase in the value of the freehold should more than make up for the lower prices achieved when selling the flats on life leases.
As many of the good people mentioned here already very well know, the residential retirement Park Homes market shares similar problems associated to escalating costs and the freeholders frequent failures to meet their repair and maintenance obligations, similarly denying that this is due to faltering sales.
In this sector and in reality, it`s oftento do with the consequences of high up-front leveraging secured at the time of cheap money and a since declining market , brought about by insatiable greed and the delusional belief that retirees exists to be milked to the point of exhaustion until they finally keel over – and then again, afterwards.
I`m much less familiar with the leaseholder sector than everyone on here – but what`s also noticable in this nich market, is that such consequences don`t seem to interfere with the re-ordering of the land owners Bugattis and the refurbishments of the yachts
Audley’s response is very interesting. They acknowledge that, despite Owners being subject to significant increases in their Management Charges, they (Audley) have not kept up with the capital expenditure. Now that they have raised finance there will presumably be a lot of catch up expenditure across all of the villages which should all see a significant amount of current and catch up investment.
They are also very clear that the Monthly and Deferred Management Charges are “collected to meet the overall costs of the villages be they short, medium or long term.” What is not clear then is why they have had to pause expenditure on the villages as Owners have all been continuing to pay their charges? Perhaps if Audley published, even some overall figures showing how much they collected in total and how much they spent on villages, that would reassure Owners.
It would be very interesting to revisit this subject in four to six months time and see if any of that catch up or current spend has materialised!!!
It’s only yet more borrowing, and will be repaid more than anything out of services revenues
“Capital” is an Audlery description I believe used to befuddle Lessees. The Service charges Audley levy do not offer a distinction between Capiital and Current expenditures on Services, and the Leases stipulate that the local Audley subsidiary may dispose of surplus services income once serevices have been supplied.
Since Audley admit they’ve deferred capital expenditures but do not assert retaining services income in the relevant local subsidiary they appear to me to be admitting to a significant brreach of their legally binding obligations.
I bet if Audley revealed their detailed accounts we’d find many of their decribed Capital expenses related to services are claimed for tax as Current expendses sincve that yields quicker tax relief, even if currently they appear loss making
“A final point, in fairness to Audley, is that its leaseholders have linked up with each other effectively thanks to the company’s own residents’ forums, which includes a representative body of all the sites in the country. In other words, Audley has made it easy for the leaseholders to communicate with each other.”
I will point out that Audley do not like communication between owners and the owners forums certainly do not facilitate this. It was through sheer hard work on some owners parts that communication became more common.
When we moved to Audley in 2021 our management charge was £425, at the end of 2025 it was £609, an increase of 43%. It is due to rise this year by 8.7% taking the overall increase to 52% over five years. This is verifiable. Why is Mr Sanderson unable to acknowledge this increase?
Finally it is not just capital expenditure which has been frozen for over a year but also repairs, renewals and refurbishment. All of these are promised in the advertising material as being financed out of the management charges. This delay is entirely unacceptable and there should be a commensurate reduction in the management charges. I would also point out that a group of owners have obtained an opinion from two leading KCs that Audley doesn’t have the authority to pool fees or to spend those fees other than on the villages from which they are raised. It certainly does not have the power to spend these fees on any purpose other than that for which they were raised. This includes debt service and refinancing.
Excellent stuff Caroline, well argued
It’s perhaps even worse than this otherwise very good article suggests here at Chalfont Dene. My wife and I moved here 4 years and 8 months ago. Since then it became clear that Audley’s strong preference for “free” panel conveyancing on purchase disguised the many defects from a lessees perspective.
First essentially no definition of services is provided. So as an example the building regulation requirement of semiporous pathways is a joke. It’s badly laid, and puddles persist for days That’s been subject of complaints for nearly 5 years and ought to have been remediated by contractor warranty, but it appears Audley cut costs and excluded ordinary warranty work,
Our so called General Manager used to park his car at an EV charging point near the entrance to the third phase and walk past a shambolic assembly of a bench obstructing the footpath forcing people using mobility wheelchairs and electric scooter chairs to go into the roadway, then past a sorry collection of cones again obstructing the footpath, until the sorry mess outside an under specified multi purpose building offering a gardeners secure room and store for phase 3 waste collection bins. The gardeners room had an attempted break in a few years ago and it’s door remained adorned with torn black and yellow tape, the outside a litter of pots and detritus the gardeners were not industrious enough to dispose of and the tawdry cedar wood lap board enclosure at the side and rear of the building left open to display the glory hole within. Our “Owners” Forum took no action over this and it took a round robin email addressed to the “GM” to shame him into tidying it up.
Equally borders nearby had not been weeded in over 6 months, challenged the head groundman told me he’d better things to do, it was badly weeded shortly afterwards but has been left untouched for months. A beautiful wildflower meadow around 1.5 acres and full of wonderful wild flowers 5 years ago this coming spring has been corrupted into an unkempt grassed area due to incompetent keeping. Etc etc.
The two entrances to Chalfont Dene are to phases 1 and 2 and phase 3 respectively, the roadways between Phase3 and Phases 1 and 2 are divided by a barrier lowerable by ambulances etc and passed by the electric minibus used to carry prospective buyers, now of vacated dwellings. The entrance to 1 & 2 is used by such prospective purchasers and received constant gardening and cleaning attention. That to phase 3 ignored as its nor seen before it’s too late
We know Audley are breaking ordinary Trust law by deploying services fees elsewhere than from out landlord and service provider companies before all services are provided and another Audley development spent a huge sum establishing this with a KC opinion. We are deeply concerned not just at the rising monthly service fees justified by an entirely inappropriate index – likely exasperated by the labour market changes brought about by BREXIT.
Audley’s main problems stem from grossly over exuberant developments financed on borrowed money mostly repaid at least once at even higher costs and yet large numbers of dwellings are still unsold shortening cash flows to repay debt and mounting interest as well as services revenues. Their business ought logically to be broken up into a true services business and a developer business. My suspicion is that L&G who loaned £40M over 50 years with the public security of freeholds of about 550 dwelling many not even yielding ground rents sees itself as a player in such a restructuring as it sold off its own retirement home business to NatWest Pension Fund before making this loan.
We also have evidence of lies about the need for us to allow staff to scan our driving licences or passports to “validate” our ages without any security warranties on protection of our personal data, something they did to ensure we passed the legal minimum age before they’d sign our leases. Subsequently it emerged they needed this for their potential lender. Why? Because their loan would be secured on our Deferred services fees payable as 1% of their assessed sale price for each year or part year as lessee and attributed in their brochures as for major works.
I’m tiring or I’d continue!
Sandersons describes his target market as asset rich cash poor, given the behaviour of the GM at Chalfont Dene one of them is wrong! Actually Sandersons knows he’s talking nonsense, what’s attractive about retirement living – something that seems as old as the hills with provisions being made through history which most certainly Nick Sanderson did not start – is a sense of togetherness with good social opportunities whether in group activities such as exercise classes or dining (OUT) groups. His assertion of cash poor has come after the huge increase of over 8.74% in services fees “justified” by use of an entirely irrelevant index, effectively the cost of care workers. Here of around 30 staff only 1.5 are otherwise unpaid care people, other care workers are paid for directly by anyone using their services and it seems those are on an as needed contract anyway.
That Audley have got away with outrageously slack legislative control is largely due to the lobbying skill of Sanderson and the lack of investigative work by previous governments both politicians and civil servants. Full marks to Matthew Pennycook and his team, including some obviously outstanding civil servants for starting to put salt over the slimy people.
Sadly the lobbying powers of both our second Parliamentary Chamber and potent advocacy by lawyers are limiting Pennycook’s reforms pro tem. But he’s not helped by the lunacy of legislation permitting companies not listed to post accounts not merely a year after a company year end but without sanction for then being indefinitely late. Can’t recall when Audley ever posted on time! The disciplines of US listed company quarterly releases and fast publication of annual reports is just as relevant, perhaps more so in the private company sector. Sadly the status quo permits Audley to escape sanction and limiting its operation that it’s real financial situation seems to me to warrant.
Here certainly the GM is anxious to take our cash by increasing sales of the chief revenue raiser he has any control over, food and beverages. Here certainly he went so far at a meeting organised to review for his and his managers (why so many?) sake why food sales are so poor. He made the silly mistake of blaming us! When I said perhaps I wasn’t th3 only one to say that the food was too poor to be worth going for he was rather deeply stunned. Another example revolves around Building Insurance
In common with even small blocks of flats, buildings insurance is the responsibility of the operator of the settlement, in this case a local Audley subsidiary delegated to a Group company where someone negotiated via a brokerage a policy. Yet another Audley manager sent a summary of that policy and I sought the entire policy to assess any first loss risk in Audley who seem to veer between gross illiquidity and an influx of funds. I was told it was no longer “policy” to issue the entire policy. So I wrote an email to the CEO of the insurer, the broker, and many other folk of influence as well as Sanderson. Lo and behold policy changed.
Just as well. A neighbour, legally trained, found the single sheet glass wall separating his shower area from the rest of the bathroom shattered. The GM’s first response was along the lines of your responsibility. On the neighbour explaining to him that actually it’s a buildings content the GM claimed he’d need to pay the excess. Neighbour explained the excess was between Audley and Insurer, no mention of excess in the lease between lessee and services provider and landlord. What a tawdry issue over £500!
John – excellent posts and I agree with you about Caroline’s excellent post as well.
My wife and I moved in to Audley Scarcroft in Yorkshire amongst the first six residents, in December 2023. We have had a horrendous time since the first weeks in with leaks in the inside plumbing as well as major leaks in the roof. The cladding on our cottage keeps breaking out with bumps and holes and I think major repairs were carried out to the cladding even before we moved in.
We have raised two formal complaints since we have been here about services and facilities not matching the glossy brochures and Sales team descriptions, but we are told that Audley will decide how the Services are provided. The General Manager is the single conduit for all of the issues that we raise as no-one at Head Office will speak to us and even when dealing with Stage 2 of our complaints the Director concerned never spoke to us and only gave us the decisions of support for the General Manager, through him himself.
I have recently been trying to deal with the Finance Director about the 8.74% rise in the Monthly Management Charge after speaking at length with the Office For National Statistics but, I am told – it is all in the lease !
Our Forum first met in April/May 2025 but have had no success with getting anything of substance changed and they have been told that the All Villages Forum has not met since our Forum was first formed ? The main problem at the moment seems to be the lack of property sales. Our team of 4 Sales staff have been selling for 18 months or so before we moved in, so 3 and 1/2 years, but currently we only have 30 properties occupied out of 128 available in Phases one and two. We are expected to pay FULL Monthly Management Charges but then are informed that most of the Services will NOT be fully operational until the Village is Full , they don’t have enough staff !! I wonder if I will still be here when that happens.
If anyone would like to contact me, or provide details of Inter Village Action groups, I can be found here at Scarcroft Village or can be found on Facebook under my name.
Hello Maurice,
What Scarcroft residents need is a residents’ Forum, which is what almost every other Audley village has. Audley pretend Scarcroft is “not sufficiently mature as a village to warrant a Forum”… ( which is their way of making sure you have no voice ! )
Please phone me at Audley Clevedon (dial 01943 811600 and ask to be put through to Mr Parris in Wharfedale Grange).
If we can arrange to meet I can tell you more… and also introduce you to the All Village Forum, which covers the higher level issues we all face across the Audley villages. Best wishes – John Parris
John – Good afternoon and thank you for your reply. We do have a Village Forum here which was elected last April but they have been told that there isn’t an active All Village Forum. We will be due for a new election in April this year. The Forum seems to be ‘blocked’ at every turn with very little being achieved. I can ring you next Monday, Wednesday or Thursday afternoon – have you got a date and time that is most suitable ? Many thanks, Maurice
Maurice, that’s simply not true about the All Village Forum – but why does that not surprise me!!. We have a very active group across all villages and are marshalling our resources to take action. Hopefully John has put you in touch with the right people!
Are Audley Retirement maximising their value before merger. And, if so, who would benefit directly from this?
Any and all replys will be greatly appreciated.
My husband and I bought an Audley property just over 3 years ago and we understood the service charge increase was determined in our lease but we expected that the services in place when we purchased would continue. This is not the case and standards have declined for example a reduction in restaurant opening hours from six evenings to three evening a week and the absence of a full time general manager . Surely greater transparency over service charges would be sensible and surely Audley have this detail available.
Good evening- does your lease nor require Audley to supply hot meals every day for all residents. Have they provided alternative meal supplies if the Restaurant is closed ?
Nothing in the lease requires them to provide any facilities. The ARCO Consumer Code does say that a restaurant must be available to provide hot meals but it doesn’t say how often.
At Cooper’s Hill, our restaurant is only open in the evenings on Thursday, Friday and Saturday (it used to be six evenings a week!!) and so there is no hot food available after 5;00pm on those other days
One other sneaky tactic they have deployed to get more out of Owners relates to Ground Rent. When Ground Rent was abolished in 2022 Audley increased the Management Charges for new Owners by an equivalent amount – Is that really what Landlords were supposed to do?!?
Four years on, that £500 has increased annually at a huge rate along with the rest of the MMC while those paying ground rent have continued paying a flat £500, now reducing to £250.
This has left a large and ever increasing disparity in management charges between those who purchased with or without ground rent.
They also charge a range of different amounts for car parking in identical spaces. It really is just any opportunity to screw a bit more out of the elderly