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You are here: Home / Latest News / The Times: ‘Exit fees and poor resale values: the uncomfortable truth about retirement homes’

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

September 10, 2016 //  by Sebastian O'Kelly

thetimessept102016The Times today (September 10 2016) reports the research 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 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.”

Campaign against Retirement Leasehold Exploitation 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 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.

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

Related posts:

DCLG stakeholders hear of ‘calamitous’ Law Commission report on exit fees Huw Merriman calls for zero ground rents for retirement leasehold at prime minister’s questions BetterRetirementHousing.com reports retirement resale disasters. On BBCR4 MoneyBox today My granny’s Audley Retirement home ‘was a money pit’ costing £48,000 in exit fees The Times SpreadThe Times reports that families ‘lost £3 billion’ on resale of leasehold retirement flats, while developers and freehold speculators made millions

Category: Latest News, News, Press, RetirementTag: Audley Retirement, Churchill Retirement Living, McCarthy and Stone, Pegasus, Retirement, Retirement Security Limited, Retirement villages

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Comments

  1. chas

    September 11, 2016 at 7:24 pm

    The Times September 10 2016) reported, research by the Campaign against Retirement Leasehold Exploitation 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 for 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 is soon after the posting, I was informed by an Estate Agent that 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 the drops in value.

    The flats that have lost most value, have Lifts, Communal Rooms, Laundry’s and Corridors with Stairs. It seems the flats original purchase costs, includes these 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?

    • chas

      September 13, 2016 at 11:41 pm

      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

    • chas

      September 18, 2016 at 3:39 pm

      This was in the Daily Mail by Richard Dyson 28/10/2012

      Précis:

      Investigation:

      The grim reality of care home sales.

      Research looked at these properties, then identified other flats in same developments sold within the past 12 months, where Land Registry records existed for another, previous sale. This showed how values had changed over a specific period. Records existed for properties in 11 of the 13 developments. The results are detailed below. They make grim reading.

      Argent Court, Barnet, Greater London

      2009 McCarthy flat marketed at £199,950
      2008 Same flat sold £266,950
      Loss of at least 25%

      June 2012 flat sold for £190,000
      October 2007 purchased for £248,447
      Loss 24 per cent.

      Wider local housing market prices fell 0.44% in the period

      Pinetree Court, Stevenage, Hertfordshire

      2012 McCarthy flat currently marketed at £130,000
      August 2006 same flat sold for £159,450
      Loss 18%

      11 Months ago most recently flat sold for £147,000
      December 2006 sold for £200,950
      Loss 27%

      Wider local market rose 3% in the period

      Northgate Court, Biggleswade, Bedfordshire

      Recent McCarthy flat currently marketed for resale at £164,950
      April 2012 Similar flat sold for £140,000
      September 2009 sold for £169,850
      Loss 18%

      Wider local house prices rose by 5%

      Eden Court, Milton Keynes, Bedfordshire

      Recent McCarthy flat currently marketed for £140,000
      Flat sold twice before:
      October 2007 for £172,351
      September 2010 for £149,000
      Both owners appear losers

      January 2012 another recent flat sold for £172,500
      October 2007 sold for £221,604
      Los 22%

      Wider market fell by 9%

      Salter Court, Colchester, Essex

      Recent McCarthy flat currently resale at £119,950
      October 2005 same flat sold £158,950
      Loss 25% over seven years

      June 2012 another flat sold for £113,000
      August 2005 sold previously for £148,950
      Loss 24%

      Wider local market grew 7%

      Portman Court, Uckfield, Sussex

      Flat currently marketed resale at £170,000
      April 2012 similar flat sold £180,000
      Previously sold in August 2008 for £249,950
      Loss £70,000 in four years (28 per cent).

      Wider market for the region, rose by 3% same period

      Amelia Court, Worthing, Sussex

      Flat currently advertised for resale at £395,000
      September 2010 same property achieved £375,000

      April 2010 another flat sold previously £228,950
      September 2010 sold £195,000
      Loss £30,000, 15%

      Wider property region dropped by 2% in period

      Otters Court, Witney, Oxfordshire

      A flat currently advertised resale at £149,950
      September 2010 sold for £177,950
      Likely loss of 16 per cent or more
      McCarthy owner made profit. Hurrah!
      June 2012 flat sold for £249,950

      Previously sold for £222,733 in November 2008
      Profit 12%

      Wider market’s growth, 9% for the period.

      Montes Court, Coventry, West Midlands

      Flat currently on market for £154,950
      May 2009 sold for £179,950
      loss of £25,000 (14% minimum)

      July 2012 another Flat sold for £179,950
      March 2008 previously sold for £229,678
      Loss 22%

      Wider market fell 9% in the period.

      Rowan Court, Thirsk, North Yorkshire

      Flat currently on market for £119,950
      July 2007 sold for £107,500.
      Profit 11%

      Late 2011 flat sold for £144,450
      May 2007 sold for £158,613
      Loss of 9%

      Wider local market fell 13% in the period.

      Timothy Hackworth Court, Stockton-On-Tees

      Flat currently on the market for £145,000
      July 2008. sold for £166,261
      Loss12%

      February 2009 sold for £158,716
      Loss 8.5%

      One neighbour did better
      June 2012 a flat in the complex fetched £220,000
      June 2009 sold for £174,950
      Profit 26%

      Wider market grew 2% in the period.

      From these figures it can be seen that McCarthy & Stone flats have in general lost large amounts from the original sale.

  2. Michael Epstein

    September 12, 2016 at 7:22 am

    Could the financial position of the freeholder have any bearing on leasehold values?
    I ask this as it has just been announced that a substantial part of the Tchenguiz empire (through Fairhold) has defaulted on their loan agreements, triggering the cancellation of swap instruments.

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