• Menu
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Before Header

  • Home
  • What is LKP
  • Find everything …
  • Contact
Donate

Leasehold Knowledge Management Logo

Secretariat of the All Party Parliamentary Group on leasehold reform

Mobile Menu

  • Home
  • What is LKP
  • Find everything …
  • Contact
  • Advice
  • News
    • Find everything …
    • About Peverel group
    • APPG
    • ARMA
    • Bellway
    • Benjamin Mire
    • Brixton Hill Court
    • Canary Riverside
    • Charter Quay
    • Chelsea Bridge Wharf
    • Cladding scandal
    • Competition and Markets Authority / OFT
    • Commonhold
    • Communities Select Committee
    • Conveyancing Association
    • Countrywide
    • MHCLG
    • E&J Capital Partners
    • Exit fees
    • FirstPort
    • Fleecehold
    • Forfeiture
    • FPRA
    • Gleeson Homes
    • Ground rent scandal
    • Hanover
    • House managers flat
    • House of Lords
    • Housing associations
    • Informal lease extension
    • Insurance
    • IRPM
    • JB Leitch
    • Jim Fitzpatrick MP
    • John Christodoulou
    • Justin Bates
    • Justin Madders MP
    • Law Commission
    • LEASE
    • Liam Spender
    • Local authority leasehold
    • London Assembly
    • Louie Burns
    • Martin Paine
    • McCarthy and Stone
    • Moskovitz / Gurvits
    • Mulberry Mews
    • National Leasehold Campaign
    • Oakland Court
    • Park Homes
    • Parliament
    • Persimmon
    • Peverel
    • Philip Rainey QC
    • Plantation Wharf
    • Press
    • Property tribunal
    • Prostitutes
    • Quadrangle House
    • Redrow
    • Retirement
    • Richard Davidoff
    • RICS
    • Right To Manage Federation
    • Roger Southam
    • Rooftop development
    • RTM
    • Sean Powell
    • SFO
    • Shared ownership
    • Sinclair Gardens Investments
    • Sir Ed Davey
    • Sir Peter Bottomley
    • St George’s Wharf
    • Subletting
    • Taylor Wimpey
    • Tchenguiz
    • Warwick Estates
    • West India Quay
    • William Waldorf Astor
    • Windrush Court
  • Parliament
  • Accreditation
  • [Custom]
Menu
  • Advice
  • News
      • Find everything …
      • About Peverel group
      • APPG
      • ARMA
      • Bellway
      • Benjamin Mire
      • Brixton Hill Court
      • Canary Riverside
      • Charter Quay
      • Chelsea Bridge Wharf
      • Cladding scandal
      • Competition and Markets Authority / OFT
      • Commonhold
      • Communities Select Committee
      • Conveyancing Association
      • Countrywide
      • MHCLG
      • E&J Capital Partners
      • Exit fees
      • FirstPort
      • Fleecehold
      • Forfeiture
      • FPRA
      • Gleeson Homes
      • Ground rent scandal
      • Hanover
      • House managers flat
      • House of Lords
      • Housing associations
      • Informal lease extension
      • Insurance
      • IRPM
      • JB Leitch
      • Jim Fitzpatrick MP
      • John Christodoulou
      • Justin Bates
      • Justin Madders MP
      • Law Commission
      • LEASE
      • Liam Spender
      • Local authority leasehold
      • London Assembly
      • Louie Burns
      • Martin Paine
      • McCarthy and Stone
      • Moskovitz / Gurvits
      • Mulberry Mews
      • National Leasehold Campaign
      • Oakland Court
      • Park Homes
      • Parliament
      • Persimmon
      • Peverel
      • Philip Rainey QC
      • Plantation Wharf
      • Press
      • Property tribunal
      • Prostitutes
      • Quadrangle House
      • Redrow
      • Retirement
      • Richard Davidoff
      • RICS
      • Right To Manage Federation
      • Roger Southam
      • Rooftop development
      • RTM
      • Sean Powell
      • SFO
      • Shared ownership
      • Sinclair Gardens Investments
      • Sir Ed Davey
      • Sir Peter Bottomley
      • St George’s Wharf
      • Subletting
      • Taylor Wimpey
      • Tchenguiz
      • Warwick Estates
      • West India Quay
      • William Waldorf Astor
      • Windrush Court
  • Parliament
  • Accreditation
You are here: Home / News / ARHM / Sebastian O’Kelly addresses retirement property managers. Were you lynched? No, they agreed: leasehold ‘granny flats’ have no future

Sebastian O’Kelly addresses retirement property managers. Were you lynched? No, they agreed: leasehold ‘granny flats’ have no future

November 21, 2017 //  by Sebastian O'Kelly

Sebastian O’Kelly, joint trustee of LKP and director of www.BetterRetirementHousing.com

Not a single voice was uttered in favour of the leasehold volume retirement flat model at the annual conference of the Association of Retirement Housing Managers last week.

The keynote speaker was Sebastian O’Kelly, joint trustee of LKP and director of www.BetterRetirementHousing.com, who said:

“The era of knocking out “granny flats”, loading the leases with sneaky fees and flogging off the freeholds to murky speculators is not the future.”

“Granny flats” was the unendearing term used by a pioneer of retirement housing to describe his leasehold product.

Throughout the day no speaker disagreed with this statement, and many – including leasehold sector commentator Jeff Platt and barrister Justin Bates – appeared to agree with him.

The report of the conference is on www.BetterRetirementHousing.com here:

ARHM cannot see a future in traditional ‘granny flat’ volume retirement sales – Better Retirement Housing

Annual conference hears why renting, mutuals or guaranteed buy-back schemes are more attractive than leasehold flat sales Not one attempt was made to defend the volume retirement housing business model as it came under sustained attack at the annual conference of the Association of Retirement Housing Managers last week.

Curiously, on the day of the conference, McCarthy and Stone announced its plans to enter the retirement rental market with housing association Places for People.

Places for People to manage funds for retirement house builder

Inside Housing, news, analysis, and comment about the social housing sector in the UK.

The invitation to Mr O’Kelly was an astonishing about-turn for the ARHM, as he has been critical of the organisation – substantially funded by FirstPort.

He told the conference in Stratford-upon-Avon:

“I pay tribute to the men and women who work in retirement property management. I think that it is appropriate that we, who are critical of the sector, do so.

“You are the intermediaries, serving the freeholders who appoint you and for whom, perhaps in some cases, you may have as much enthusiasm as we do.”

The invitation to Mr O’Kelly was an astonishing about-turn for the ARHM, as he has been critical of the organisation – substantially funded by FirstPort Retirement – in the past.

Retirement property managers at the ARHM annual conference in Stratford-upon-Avon

He told the conference in Stratford-upon-Avon: “I pay tribute to the men and women who work in retirement property management. I think that it is appropriate that we, who are critical of the sector, do so.

“You are the intermediaries, serving the freeholders who appoint you and for whom, perhaps in some cases, you may have as much enthusiasm as we do.”

Public disgust at leasehold practices – at their worst with the elderly – has prompted political intervention, with Communities Secretary Sajid Javid expected to announce his initial response to his investigation into plc housebuilders foisting doubling ground rents on their customers.

Cecilia Brodigan, a leasehold consultant, who now runs the ARHM

Sebastian O’Kelly said:

“Who would have thought the boring issue of ground rents would appear on the front page of The Times?” Tweeted one prominent leasehold sector insider.

“Well, I think one should turn that question round.

“Here we had plc housebuilders selling first-time buyers toxic leases on houses that should not have been leasehold in the first place – and now cannot be resold because mortgage lenders won’t touch them. 100,000 flats and houses are blighted as a result, according to Nationwide.

“The builders were aided in this process by generous dollops of taxpayers’ money through the Help To Buy scheme – supposedly designed to expand home ownership, particularly among the first-time buyers. In many cases, they came off short-term tenancies that they could at least walk away from, and were then steered onto leasehold long-term ones with the most egregious wealth-eroding terms.

“The conveyancing solicitors recommended to buyers by housebuilders – in some cases “approved” by developers – appear to have acted as little more than stooges in this racket, failing to highlight lease conditions that are, frankly, outrageous.

“Then the housebuilders flogged off the resulting income streams in the freehold to anonymous speculators who hide their beneficial ownership behind nominee directors, and who are often based offshore.

“Along the way there were quite a few fibs by the sales staff, notably that the buyers of these leasehold properties would be offered to purchase the freehold.

“The offer never came good.

“So, my question is: who but a leasehold sector insider would not recognise that a national scandal of this sort would get front page treatment and that the wider public would be utterly appalled?”

With now 127 MPs and Lords in the All Party Parliamentary Group, Mr Javid ordering a second consultation on property management, and Justin Madders MP pushing forward a Private Member’s Bill to allow that qualifying leaseholders be able to purchase their freehold at no more than 10 times the annual ground rent – leasehold reform is gathering pace.

“None of these actions would have come about had it not been for the activities of the Leasehold Knowledge Partnership.

“At last the failings of leasehold that we have been campaigning against are out of the long grass – beyond the Office of Fair Trading, the Competition and Markets Authority, the paper-shuffling stakeholders’ forums with civil servants – and are now being addressed by a less anaemic forum: national media, politicians and the public at large.

“From that mix something substantive will emerge, either from this government, or perhaps its successor.”

“We have no idealised view of commonhold. For sure, people being people they will bicker and argue and litigate amongst themselves as they always have done, and perhaps let the building run down a bit to save money. Does that matter much?

“No, they will be problems of their own causing and the consequences will be borne by them and resolved by them, just as they are in every other country in the world apart from England and Wales.

“Let’s be clear on this: we think that the leasehold system is fundamentally wrong; that its adoption in England and Wales is anomalous; that the rest of the world does not make property ownership so complicated; that it gives a green light to the unscrupulous to monetise people’s homes; that it is incorrect to equate long term tenancies – leasehold – with property ‘ownership’.”

Nonetheless, Mr O’Kelly – who stayed in Stratford at Margaret Court a guest of retirement housebuilder Bob Bessell, of Retirement Security Limited – spoke in favour of retirement housing as a concept.

“It is a good thing that the elderly live communally in housing where they can mutually support each other and socialise, particularly if they have been recently bereaved …

“It is good that the elderly downsize and sell their large and unused family homes. This frees up the housing market for future generations.”

But there have been numerous scandals, evidenced by two Office of Fair Trading investigations.

One resulted in FirstPort / Peverel running a price fixing racket to cheat 65 retirement sites into buying expensive electronic door entry systems from its subsidiary Cirrus.

Back in the 1990s McCarthy and Stone unsuccessfully sued The Daily Telegraph for £1 million over articles alleging rip-off service charges.

McCarthy and Stone and a media firestorm in 1991 – Carlex

The Dispatches programme on Monday night is not the first time McCarthy and Stone has been in the eye of a storm. In 1991 in launched a disastrous High Court action against the Daily Telegraph claiming £800,000 damages over articles about service charge fiddles.

Mr O’Kelly also addressed the offshore ownership of

“But far more valuable than the exit fees were the sale of the freeholds themselves, and the lucrative management contracts that that involved. Particularly lucrative, in fact, if the freeholder actually owned the management company providing the service, which was then the case.

“I am not going to dwell on this, but I do feel retirement housing would be … well, less complicated if the bulk of the freeholds were not owned by a supposed family trust based in the British Virgin Islands.

“Similarly, I am sure that there are many older people who would be more comfortable if the jiggery-pockery of high finance were not somehow involved in the freeholds of their homes.

“Many find these practices very unfamiliar and uncomfortable in the country that they thought they knew.”

The speech reference the anger of the property tribunal that Eric Matthews, 94, a former World War II squadron leader, had to waste what time remained to him fighting inflated insurance commissions at Strand Court, in Rye.

It ruled that the acceptable commissions were zero.

How a wartime squadron leader, 94, downed Peverel – Better Retirement Housing

Eric Matthews, dealing with irritants aged 94 Interview with Eric Matthews on the Channel Four website During the Second World War, when Eric Matthews, 94, was an RAF squadron leader, he was used to chalking up downed enemy aircraft. Now he is celebrating another victory over a lesser adversary: Peverel, which has had to pay back £11,475.34p.

Mr O’Kelly went over the OFT’s “pathetic and tokenistic” ruling that thousands of pensioners had been cheated in the Cirrus scandal – and that everyone involved got off scot free.

“The only criminal sanction threatened during the entire process involved the pensioner whistleblowers, who were warned not to blab to the press during an OFT investigation.”

Peverel cheated pensioners in £1.4 million tenders at 65 sites, says OFT – Better Retirement Housing

now ALL sites should exercise right to manage and be rid of them … ‘the system is rotten’ to have allowed Peverel / Cirrus to get off, says Bottomley UPDATE: Guardian reports OFT / Peverel / Cirrus scandal UPDATE: BBC reports Peverel / Cirrus price-fixing scandal The Peverel / Cirrus price-fixing scandal was finally confirmed by the Office of Fair Trading today, which found that retirement leaseholders had been cheated in tenders worth £1.4 million.

The speech also addressed the issue of the right to manage application of Elim Court, in Plymouth, which was finally won in the Court of Appeal earlier this year.

This was also addressed later in the conference by judge Siobhan McGrath, who heads the property chamber.

“Look, too, at the sites that have gone right to manage. In the main they are examples of successful and harmonious communal living, where the third party monetiser has largely been stripped out.

“It takes a lot for a retirement site to be provoked into opting for right to manage, and with perhaps as many as a fifth to a quarter of the residents infirm, dying or in fact dead the hurdles involved in pulling it off can be considerable.

“Although we deprecated the wisdom of Elim Court in Plymouth fighting on for its right to manage in the Court of Appeal earlier this year, we are absolutely delighted that it finally won its five-year marathon.

“Otherwise the legal costs butcher’s bill could have been extremely high: in fact, to the point of endangering the leaseholders’ continuing ownership of their homes.

“Had that happened – I say this to those involved in the legal smart aleck-ery of derailing right to manage applications – you can be pretty certain that that, too, would have ended up on the front pages and been discussed in Parliament.

“It is thoroughly depressing – although sadly inevitable – that tripping up right to manage has become a cottage industry for legal practitioners in this sector.”

Elim Court: If you want right to manage, this is how NOT to go about it – Better Retirement Housing

Elim Court in Plymouth has escaped from its right to manage debacle by the skin of its teeth, having been led to near ruin by right to manage facilitators. After having had its right to manage application turned down in the lower tribunal (freeholder’s costs: £10,000) and then thrown out by the upper tribunal (freeholder’s …

Finally, Mr O’Kelly praised other business models, such as the ExtraCare Charitable Trust and the Methodist Housing Association, both of which buy back retirement flats at 95 per cent of their value.

This spares purchasers’ families from the catastrophic falls in value seen with the volume housebuilders.

“Indeed, do these actually need to be property purchases at all? Some believe a “licence to occupy” similar to schemes in Australasia would be a better solution. Others say they might as well be members clubs or hotels, which they more closely resemble.”

There was a surprising degree of support for this view.

The day after the conference, Mr O’Kelly attended a sector event and said he had been speaking at the ARHM conference.

“Did they try to lynch you?” he was asked.

“No,” was the reply. “Astonishingly, they seem to agree with much, most or even all of what I had to say.

The retirement housing sector seems to be changing very fast.

Sebastian O’Kelly addresses the retirement property managers. Were you lynched? No, they agreed: leasehold ‘granny flats’ have no future – Better Retirement Housing

Not a single voice was uttered in favour of the leasehold volume retirement flat model at the annual conference of the Association of Retirement Housing Managers. The keynote speaker was Sebastian O’Kelly, joint trustee of LKP and director of BetterRetirementHousing.com, who said: “The era of knocking out “granny flats”, loading the leases with sneaky fees …

Related posts:

Retirement sector thought it would prompt leasehold reform, but leasehold houses and double ground rents were even worse … Pensioners ‘turn to old Peverel politburo at Freemont Property Managers for right to manage’ Should you buy a leasehold retirement flat, asks Telegraph ‘Dump Roger Southam. Appoint Sebastian O’Kelly,’ National Leasehold Campaign tells housing minister Sebastian O’Kelly wins second press award for leasehold reform

Category: ARHM, Latest News, News, RetirementTag: ARHM, Bob Bessell, Elim Court, Margaret Court, Retirement, Sebastian O’Kelly, Strand Court

Latest Tweets

Tweets by @LKPleasehold

Mentions

Anthony Essien (34) APPG (37) ARMA (87) Bellway (30) Benjamin Mire (32) Cladding scandal (71) Clive Betts MP (31) CMA (45) Commonhold (52) Competition and Markets Authority (41) Countryside Properties plc (33) FirstPort (42) Grenfell cladding (56) Ground rents (54) Harry Scoffin (150) James Brokenshire MP (31) Jim Fitzpatrick (35) Jim Fitzpatrick MP (30) Justin Bates (40) Justin Madders MP (67) Katie Kendrick (37) Law Commission (60) LEASE (66) Leasehold Advisory Service (62) Leasehold houses (32) Long Harbour (48) Martin Boyd (80) McCarthy and Stone (39) National Leasehold Campaign (38) Persimmon (49) Peverel (61) Property tribunal (49) Redrow (30) Retirement (37) Robert Jenrick (33) Roger Southam (47) Sajid Javid (38) Sebastian O’Kelly (55) Sir Peter Bottomley (201) Taylor Wimpey (106) Tchenguiz (33) The Guardian (33) The Times (31) Vincent Tchenguiz (43) Waking watch contracts (40)
Previous Post: « Blenheim Centre flat owners to be spared £20,000-30,000 each on Grenfell cladding bill, Legal & General tells LKP
Next Post: We are dissatisfied with the running of LEASE, APPG chairs tells housing minister »

Reader Interactions

Comments

  1. Michael Epstein

    November 22, 2017 at 8:39 pm

    Admin, you say ARHM is substantially funded by Firstport (formerly Peverel )Retirement?
    Can you remind me as to what action ARHM took against Firstport Retirement after they admitted price fixing 65 retirement developments?

    • Michael Hollands

      November 22, 2017 at 9:57 pm

      After the ARHM decision not to punish Peverel/ First Port I met their current and past Chairwomen/Chairman, and asked them why they took no action.
      Their answer was it would be better to have Peverel in the organisation so that they could monitor them, rather than them being expelled and outside their control.
      Nothing to do with them being the major funders, so they said.
      It’s very similar to the ARMA position where they also just issued a slap on the wrist, remembering FP Property Services are members with one of their Directors on the ARMA Disciplinary Board..
      It just goes to show that these are Trade Organisations that protect their paying members, rather than punishing them for breaking the Codes which are supposed to protect their customers.

      • Kim

        November 22, 2017 at 10:50 pm

        Oh so better to have the recalcitrant member inside the tent P#ss#ng out , rather than outside the tent Piss#ng In ?

        What a rum lot!

    • admin

      November 22, 2017 at 11:13 pm

      Dear Scourge (Mr Epstein),

      It was something along these lines:

      ARHM’s pathetic response to the Peverel / Cirrus scandal – Better Retirement Housing

      In the club: Richard Wheeldon, ARHM vice chair, part of the Cirrus review team and an executive of Housing and Care 21 housing association. It handed out a bumper contract to Cirrus in February, two months after the OFT found it had carried out collusive tendering and without waiting for a decision on the company by the ARHM review team.

  2. Michael Epstein

    November 23, 2017 at 7:09 am

    Thanks Admin,

    Sometimes we can forget the true enormity of the price fixing scandal and in particular as to whom it was carried out against? So we say 65 retirement developments, when in reality it was carried out against vulnerable individuals at a time of their lives when they should be able to relax and enjoy their final years.

    That Peverel (Firstport) worked “hand in glove” with Cirrus is evidenced by an “off the record” test that established the same stationary was used by companies for the stooge quotes as was being used by Peverel/Firstport.

    It should not be forgotten either, that ultimately residential service charge funds were used as part of the price fixing fraud. (So much for their protected status!)

    Andy Davey was mentioned. People might like to learn he has now left Firstport. (You may recall that FirstPort in their defence of the price fixing fraud said that “all those involved no longer work for Firstport”. And yet it is only in the past few months that Andy Davey departed to pastures new.

    And where is he now? Unbelievably he works for Ainsclough Crane Hire.

    And who took him on? None other than Janet Entwistle! (Does that name ring a bell with anyone?)

    • Michael Hollands

      November 23, 2017 at 9:03 am

      Janet was always a big admirer of Andy’s management capabilities.
      She left Peverel First Port when the going got tough, particularly on the Price Fixing issue. Andy stayed on for several years.
      I think after taking up her position at Ainscough Crane Hire, she took on Andy because he needed a lift.

  3. Kim

    November 23, 2017 at 8:21 am

    Drain the swamp. Nuf said.

  4. Michael Epstein

    November 29, 2017 at 5:55 pm

    It is not always the case that every retirement development flat (particularly when managed by Firstport) loses value.
    According to their accounts, Firstport managed retirement development house managers flats have bucked the trend and increased in value by £1.75m!

Above Footer

Advising leaseholders. Avoiding disasters.
Stopping forfeiture. Exposing abuses. Urging reform.

We depend on individuals for the majority of our funding.

Support Us and Donate

LKP Managing Agents

Become an LKP Managing Agent

Common Ground
Adam Church
Blocnet property management2

Stay in Touch

To achieve victory in the leasehold game where you are playing against professionals and with rules that they know all too well - stay informed with the LKP newsletter.
Sign Up for Newsletter

Professional Directory

The following advertisements are from firms that seek business from leaseholders.
Click on the logos for company profiles.

Footer

About LKP

  • What is LKP
  • Privacy and data

Categories

  • News
  • Cladding scandal
  • Commonhold
  • Law Commission
  • Fleecehold
  • Parliament
  • Press
  • APPG

Contact

Leasehold Knowledge Partnership
Open Data Institute
5th Floor
Kings Place
London N1 9AG

sok@leaseholdknowledge.com

Copyright © 2023 Leasehold Knowledge Partnership | All rights reserved
Leasehold Knowledge Partnership Limited (company number: 08999652) is a company limited by guarantee that is a registered charity (number: 1162584) with the Charities Commission.
LKP website is hosted at www.34sp.com
Website by Callia Web