May 26, 2024

Contact Campaign against retirement leasehold exploitation before buying a leasehold retirement flat, says Daily Mail

DailyMail1By Sebastian O’Kelly

Advice from the Daily Mail last week on buying a leasehold retirement property: contact Campaign against retirement leasehold exploitation first!

Well, at least you will get the downside of this property transaction.

Any purchaser must understand – as an experienced property investor put it to me last week – McCarthy and Stone and Peverel are absolute experts at getting money out of old people. And you can include the other retirement providers such as Churchill (which is owned by the McCarthy family) and Pegasus as well.

Prices of new retirement flats have very little relation to their re-sale value, so expect a substantial reduction: 40-50 per cent off peak is not unusual.

Daily-Mail2The investor I met last week has accumulated a number of retirement flats and has never paid more that £42,000. The cheapest was £22,000, and he likes to buy flats at approximately their asking price when new in 1986.

The worst properties of the lot are the “retirement village” complexes often set around a nice country house run by stand-alone operators. Here it can be quite uncertain what buyers have actually bought.

One site in Hertfordshire had such an onerous lease that the property was virtually unsellable. It was the most extraordinary lease ever seen by LKP lawyers.

This can be a serious headache for heirs to the property, but it is a disaster for the residents who need to move for some reason – running out of money? – or need to go into further care.

The worst example I have come across was a £400,000 cottage, empty and unsold for six years, which meant the estate had paid £35,000 in service charges for an empty flat, and it was on the market at £250,000.

Campaign against retirement leasehold exploitation is trying to unravel a similar desperate retirement housing scandal in the Hertford constituency of Mark Prisk, the former housing minister.

Buying second hand or renting are obvious alternatives.

Another form of ownership is a lifetime interest based on an actuarial assessment run by HomeWise, based in Worthing. When you die or leave the property for further care, your interest comes to an end.

This strikes me as a model worth exploring, and Campaign against retirement leasehold exploitation would be very interested to hear of people’s experiences.

I like the actuarial model and the ironies it can throw up.

My father had a wonderful pension as a result of it, when he was asked the following questions:

Do you smoke? Yes

Do you drink excessively? Yes

Are you overweight? Oh, yes

Do you take any exercise? No. Did it all in Burma, 1942-45

The result: a stonking pension in confident expectation that he would quickly pop his clogs.

In fact, he lived to 85, outliving all of his clean-living friends.


  1. I bought a lifetime interest in my present flat that remains in force until the last incumbent dies or moves out for whatever reason.

    I/We can move out at any time and the flat reverts to the lease holder [not the landlord] as I was an under leasee.

    I calculated that as long as I stayed in the flat for 10 years it would be cheaper than renting from say Girling’s for the same period [not withstanding rent increases] possibly shorter.

    I pay service charges at the same rate as a leaseholder.

    My dependents are aware and approved the move and its repercussions, realising there won’t be any inheritance from the flat or the need for the executors of the will to sell the flat if required.
    VERY important considerations.

    I bought a retirement flat in 2001 for £62k lived in it for 5years and sold it for £125k. Good Old Days??

    Bought life interest in present flat for £60k in 2005, a better flat – better situation – better environment – bigger nest egg.

    This will not suit everyone of course. but it does us.

    Downside, got Peverel as a Managing Agent and Fairhold as a Landlord- Well you can’t win them all, thanks to Campaign against retirement leasehold exploitation these two mavericks are being tamed.

  2. Trevor Bradley says

    Sebastian, due to your substantial workload, if you need any assistance in answering enquiries on why not to buy retirement leasehold just pass them on to me. I should be easily able to give 3 A4 pages of why not to buy (depending on who is the landlord and managing agent of course)
    Trevor Bradley. Director of a management company (we only manage freehold)

    • Campaign against retirement leasehold exploitation says

      Thanks Trevor. I won’t pass by an offer of support. All the best, Sebastian

  3. Kevin, your storey is good and well put.

    Most of the residents in our development believe they purchased and own their flat, lock stock and barrel.
    I have attempted to inform the residents but realised that they had not been aware that they had only purchased the right to live in the flat for the period of the lease.

    A recent resident who moved in, in 2012 heard what I had said and challenged me very aggressively that they own the flat completely and I was a **** stirrer.

    He stated that the solicitor was a friend and would never have allowed him to purchase such a poor investment as leasehold.

    I said good morning to him recently and he cried and cried! he stated that he was sorry for doubting me and calling me all the names he did. His old friend that he had not seen for a year contacted him and was shocked that he had purchased a leasehold flat and even more shocked that his friend the solicitor had taken advantage of him, and not informed him of the problems with leasehold.

    This was to become even worse as he was then informed that the Managing Agents were Peverel Retirement Division and the Development was a Tripartite Lease with Peverel Group the owner of the Headlease?

    He stated that the friend his sacrificed friendship for money, he has recently attempted to sell the flat but the price he paid in 2012/13 is now £10,000.00 less than the other one in his development on the market.

    • Your welcome CHAS, I know the feeling, Ihave a selection of doubting and grossly uninformed Thomas’ and Theresa’s here.

      I didn’t want to sound excessively pessimistic last night and pile the agony on too much but your new friend might also consider the worst case scenario whereby he dies and the property becomes part of his estate to hand over to his loved ones.

      But first it has to be sold before probate is executed, and whilst it is waiting for a buyer with the grossly inflated valuation that estate agents seem to put on these properties, someone will have to continue to pay the service charge and council tax.

      In my development this would amount to £2000 and £1570 [depending on contents] per year.
      A disastrous and unexpected commitment for a past loved relative heir or heiress to have to pay.

      There would come a point when it would be prudent to just forfeit the lease back to the landlord in order to extricate oneself from the financial obligation to break even.

  4. This is cry for help to Fleeced, Ollie and Jane. Valuation Office have rejected my claim to be reassessed from Band E. I pointed out identical flat was Band D and he says “I will consider whether the bandings of any other properties in the area need to be increased” (oops)
    He says that there is no appeal against his review. I can only appeal to valuation tribunal if a valid proposal has been made to him and he does not think I am able to make a proposal he will accept. What do I do ?

    • Brenda,
      Sorry to hear your news. It might be worth your while reading through the Money Expert Forum on Council Tax banding ?

    • This website below may be a guide on the banding range fixed in 1991 and what to do if you disagree :

      Band D starts from 68K up to 88K and Band E starts from 88K to 120K. You should check if the first price paid at start of your lease is slightly about the start of the band e.g 69K or 89K . Then you may have chance to argue your case .

      If the first price is near to upper limit of the band 67K or 87K , then I think you will have little chance of success in dropping to the band below unless you can prove there is a mistake such as you have a one bed flat and your neighbours are all 2 bed houses.

      • Bit of a surprise. Valuation Office have today said they will review my appeal for reassessment again.
        They comment that high initial pricing by MCarthy & Stone has been raised in English tribunals before.
        Apologise for taking up time on this issue but perhaps it is another warning for prospective purchasers particularly those buying from new.

  5. Trevor Bradley says

    Just to give an example to any interested regarding the “other side” by which I mean Freehold.
    Apart from being a director of our management company I also live in the complex of 18 flats that we own as Freeholders. The only criteria is occupier(s) must be over 55. Regarding values, our flats have ALWAYS increased in value, and even today by at least the average current rate of house price increases. Also one flat that went on sale in November was sold within 12 hours to someone who had been looking in the area for over 4 months at “retirement Leasehold” A second flat went on the market last week and that one has already sold and at a higher price than the one in Nov.
    Two other complexes that are Freehold in the same locality also experience the same as ourselves
    Freehold, or the right to manage, is the only way to go

  6. Hi Trevor

    You say the criteria is occupier(s) must be over 55 on the complex that you live in. How are you able to ensure that this criteria is strictly adhered too?

    If it were a retirement development and one of the partners were under the min age 60, by 10 years, are they refused the right to live there.

    Is it a requirement that persons staying over night on developments are required to register with the House Manager and that there is a 3 week maximum that any one under age can remain living at the flat?

    Also Trevor, is it a legal requirement that a seller pays for a Peverel Purchasers Pack, £302.00 which is then paid for by the incoming resident.

    Are younger House Managers with children exempt from the criteria of age, as the lease/freehold are different from the residents.

  7. Trevor Bradley says

    Hi Chas, I can only give you my opinions really as I do not get involved with managing leasehold or with any horrendous landlords/MAs that do, except the one my 94 year old mother has been in for 25 years and, although not managed by Peverel is still horrendous and has driven me to dispair.
    If its an over 55s complex then, providing it is in the lease, that is what it is. I have never come across a problem where the purchaser is “underage”. Suspect the solicitors involved would also check at purchase.
    If the lease states a figure, then that is what it is (I am talking residents here – not the HM and partner etc)
    Some leases, like ours one bed and 2 beds flats say, max occupancy must be 2 persons, one over 55 and spouse of at least 40 or more years.
    We are freehold and our management do not expect a resident to “register” their guests but I belieive that can be expected in some developements (If applicable this should be in lease or the MAs residents rule/guide book – I hate that word “rules”) Businesses and the like often require visitors to “register” due to H & S reasons and fire evacuation re number of people on site
    If any guest/visitor was under age we would not expect them to stay over night for more than say 2 weeks “holiday”.
    We would take appropriate action if t could be clearly seen that more than 2 persons were regularly occupying a flat whether underage or not.
    Where my mother is,the HM lives with her partner and ond child approx 12 years old. The HM flat will carry a different criteria. Where that can be found for your complex I do not know.
    Re “Purchase Pack”, Each MA will have their own criteria. I don’t think you can bring the word “legal” into it.
    I would have thought you could pass yours on or, Pev should provide a new one to a purchaser and charge the purchaser direct (If this is/was the case again I would expect that transaction to go through the purchasers solicitor)
    Surely a good purchasers solicitor will have wanted to read through a MAs “Purchase Pack” or “Residents Rulu/Guide Book” before recommending his client to purchase the LEASE
    I cringe at some of the charges these MAs make. If I remember correctly ours probably covers max of 10 pages for guidance to the resident. We would not dream of charging for it. If a new resident arrives we make sure the previous resident has handed it over to the purchasers solicitor and, if not, pass a new booklet to the new purchaser foc. All part of the service. After all, the residents/freeholders can sack/dispose of their MAs at a moments notice – hence the need to strive to give an impecable service
    Likewise if a resident askes permission to have new windows at their expense, and at identical configuration and external colour we give approval in writing within 24 hrs. However we do not charge any fee for things like this.

  8. Michael Epstein says

    Before buying a leasehold retirement apartment, have a good look at resale values.
    Perhaps if the resident who purchased a leasehold apartment at Homefylde House, Blackpool had done this, they would not now be faced with trying to sell the property for £29,000!

    • The apartment block at Homefylde House Blackpool was built by MaCarthy & Stone in 1989 , has 55 x 1 & 2 bed units, wheel chair access, day house manager and is located 2 miles from city centre and managed by Peverel Retirement. What was M&S standard of internal finish for flats like in 1989 ?

      If the flat was sold under leasehold title on 99 years lease , then the unexpired term remaining is now 74 years. Building accepts new residents from 55 years age and higher, including cats and dogs .

      Anyone interested in buying this flat should seek a statutory 90 years extension at peppercorn ground rent and expect the cost to be around 6% of market value of long lease. Also needs to alow for legal cost and surveyers costs which may add another 2K . The 99 years leases were set just too short .

      New leases offered in 2014 should be 199 years starting at Nil ground rent . Yes , Most definately Nil ground rent . Nil landlord consent for subletting and 25 fee for registration of transfer of title.

      • I disagree politely of course-many issues could be solved by granting “my” mandatory “P-1 lease” perpetuity less one year.

    • Mcarthy and Stone are now offering apartments on their new Ilfracombe development at 20% discount on the list price as a January Sale offer.

  9. Also remember as Trevor Bradley has posted on 22nd January 2014, leaseholders collectively owning the freehold title is the only way forward .

    Leaseholders must make the effort to buy the freehold as soon as they get the keys since it costs much less to buy at 99 or 98 years unexpired compared to cost of extending the lease at 74 years.

    The free guides to freehold enfranchisement and statutory lease extension can be downloaded from

  10. Florida is littered with graduated care communities with people buying a house or condo in a private community and they progress into assisted living, and eventually hospice care. This is funded by the house or condo reverting to the community at that time. The communities are owned by investors, many of who are doctors…..

  11. Property reverting to “the community” sounds like a form of communism in practice inside the communes of the Florida retirement homes.

    In England and Wales, our lot have signed up for the 99 years leasehold system where the property reverts to the freehold reversioner which is even worse than communism.

    • Its just sales labelling by the owners. Like owning your ( leasehold) home by McC & S. I am not sure about communism Ollie, as they almost invariably vote republican and venerate the late President Reagan.

  12. Trevor Bradley says

    What a flippant statement, “Just Sales Labelling”. I don’t think so in the case of McC & Stone. They know exacly what they are doing and saying. Another scam and totally misleading statement. When they know most of their “purchasers” (of a LEASE) are at a vunerable stage and their relatives/family are probably well stressed and never aware of “what really lies ahead”

  13. Hi
    I noticed that Mc&S say that they charge for service charge at cost.
    This is not a generous gesture as the law has established that the landlord is not entitled to profit from the service charge ( Jollybird v somebody) unless the lease allows.
    P Beech

  14. Michael Epstein says

    P Beech,
    You are correct, however, by the inventive use of “connected” companies it is all to easy for Freeholders/Managing Agents to get around this.
    A classic example of this would be Peverel’s use of Kingsborough, who would charge up to 40% insurance commissions for “services” rendered.

  15. Michael,
    How do we get Peverel Retirement to reimburse the £8,000.00 plus they have received according to Chris Owens in emails he has made to me where he has stated this as fact?

    Chris Owens has also stated that Peverel are our Freeholder/Landlord and Managing Agents I think he has been given (Peverel Information)

    We have been paying over £2,300 in VAT since 2011 as Peverel Retirement stated that on 14/03/11 we were no longer part of the Peverel Group, which are the 4 companies known as The Consensus Business Group:-

    Peverel Limited
    Peverel Group Ltd
    Aztec Acquisitions Ltd
    Aztec Opco Developments Limited (together the Consensus Business Group or Peverel Group) depends on what they, Peverel wish to let residents know, or understand.

    Peverel have for years taken advantage of the retirement sector as they are aware that due to age and health that 90% will accept that being cheated by the Managing Agents is what they have come to expect and feel that no one listens to them not even at times their family?

    This has become an epidemic amongst the retirement sector as the family believe that they will not cope with the rigors of preventing the Managing

  16. Continued as the Reply left me when I had not completed my comments?

    Managing Agents from continuing to cheat.
    The elderly, as we are seen as Cash Cows to unscrupulous Managing Agents will continue to be taken advantage of whilst the 90% of the residents refuse to get involved or allow residents like me to continue to fight on their behalf? They have been convinced by Peverel and those that help them that every thing is OK?
    What a shame that we as residents/pensioners no longer have the spirit to prevent the enemy from taking all our money?

  17. Michael Epstein says

    If you have proof that Peverel Retirement has £8,000 set aside, simply awaiting payment, than Peverel’s failure to pay could be taken to the Small Claims Court.