December 15, 2017

Abysmal retirement housing values revealed on the Land Registry

Retirement housing values at Risingholme Court have plummeted since it was built by McCarthy and Stone in 2007. One flat has fallen in value by £164,188 in seven years

Retirement housing values at Risingholme Court have plummeted since it was built by McCarthy and Stone in 2007. One flat has fallen in value by £164,188 in seven years

Campaign against retirement leasehold exploitation examines official re-sale prices for McCarthy and Stone, Churchill Retirement Living, Audley Retirement, Retirement Villages, Retirement Security, Anchor and Pegasus


A dismal picture of retirement housing values on re-sales is revealed by Campaign against retirement leasehold exploitation from figures in the Land Registry.

For years we have been saying that retirement property can be a most dubious residential property investment, and the figures on retirement housing values appear to confirm this.

In some sites retirement housing values have plummeted from new and are a fraction of what the properties were sold for by the developers.

An example is Risingholme Court, High Street, Heathfield, East Sussex, TN21 8GB, a 47-flat scheme built by McCarthy and Stone in 2007.

Here Flat 25 has collapsed from a first sale when new of £225,688 on April 29 2008 to £61,500 on November 25 2015.

That’s a loss of £164,188 in seven years.

Yet according to Rightmove the price of an average property in Heathfield is £250,322. Flat sales average £125,266, and property prices rose five per cent last year.

Other flats in the complex also show drastic falls in value, which have no connection at all to the local property market.

(All losses and gains are from the price paid when new.)

McCarthy&StoneValuesRisingholme Court, McCarthy and Stone, Built 2007:

  • Flat 11
    2014-08-21 £105,000
    2009-06-22 £206,950
    2008-04-29 £206,677
    Loss £101,677
  • Flat 18
    2014-09-25 £130,000
    2007-12-12 £231,950
    Loss £101,950
  • Flat 2
    2014-09-25 £160,000
    2011-04-28 £165,000
    2007-10-11 £207,321
    Loss £47,321
  • Flat 3
    2015-05-15 £140,000
    2008-11-27 £265,950
    2008-04-29 £288,462
    Loss £148,462

But the same trend is revealed in retirement housing values, in slightly less stark terms, at Dickens Court, a site of 72 flats in Margate, built by McCarthy and Stone in 2006.

Built towards the end of the property boom, every single flat is now selling for considerably less than the price paid when new.

The falls of some are close to 50 per cent.

Dickens Court, McCarthy and Stone, Built 2006:

  • Flat 11
    2016-07-12 £95,000
    2007-01-26 £143,950
    Loss: £48,950
  • Flat 14
    2015-02-05 £120,000
    2006-08-25 £198,950
    Loss: £78,950
  • Flat 17
    2015-07-31 £82,500
    2007-05-18 £158,950
    2007-01-31 £153,301
    Loss: £70,801
  • Flat 20
    2014-10-07 £77,500
    2007-08-24 £120,950
    2007-01-31 £140,544
    Loss: £63,044
  • Flat 26
    2016-03-04 £91,500
    2009-07-08 £119,950
    2007-09-07 £154,950
    2007-01-31 £154,550
    Loss: £63,050
  • Flat 60
    2015-11-27 £74,000
    2007-03-30 £159,950
    2007-01-31 £150,126
    Loss: £76,126

Another site of 43 flats chosen at random is St George’s Court, in Ferndown, Dorset, a retirement housing site that was built by McCarthy and Stone in 2001.

The relevant sales are those made in 2014 – 2016, and all show pronounced falls on the price paid for the flats when new.

St George’s Court, McCarthy and Stone, Built 2001:

  • Flat 11
    2014-07-04 £121,000
    2002-11-15 £154,450
    Loss: £33,450
  • Flat 12
    2014-08-06 £155,000
    2012-11-21 £130,000
    2002-08-01 £182,450
    Loss: £27,450
  • Flat 23
    2013-06-14 £85,000
    2008-05-15 £149,950
    2004-02-20 £178,950
    Loss: £93,950
  • Flat 27
    2014-03-10 £82,000
    2009-09-28 £82,500
    2006-08-22 £140,000
    2002-12-19 £155,450
    Loss: £73,450
  • Flat 29
    2014-06-17 £82,500
    2002-02-28 £161,950
    Loss: £78,450
  • Flat 30
    2015-12-01 £123,500
    2004-05-17 £162,500
    2002-07-12 £161,950
    Loss: £37,450
  • Flat 31
    2015-11-30 £115,000
    2004-04-02 £157,450
    Loss: £42,450
  • Flat 35
    2014-12-04 £89,000
    2006-08-04 £129,950
    2003-02-28 £148,450
    Loss: £59,450
  • Flat 36
    2015-08-03 £129,950
    2008-11-21 £145,000
    2003-01-03 £165,950
    Loss: £36,000
  • Flat 38
    2016-04-28 £105,000
    2002-09-20 £141,450
    Loss £36,450
  • Flat 39
    2016-02-19 £127,000
    2014-08-08 £87,000
    2004-06-30 £177,450
    Loss: £50,450
  • Flat 7
    2014-04-29 £103,000
    2011-03-25 £115,000
    2002-08-30 £159,450
    Loss: £56,450

But how are other retirement housing providers’ property values holding up?

ChurchillRetirementLivingChurchill Retirement Living was set up by Spencer and Clinton McCarthy, the two sons of John McCarthy, the founder of McCarthy and Stone.

The sites are managed by its own management company Millstream and there is an estate agency in the group called Stratton and King.

The results of Churchill Retirement Living’s Cornerway Lodge in Hindhead, Surrey, may seem slightly better, but then the 29 flats were built during the downturn in 2010.

At this point all UK property was keenly priced, and retirement sales were sluggish. Since 2010, property in Hindhead has increased in value markedly, with average house prices £451,717 and average price of flats £206,290.

Were Cornerway Lodge a non-retirement site we would expect prices to have increased. In some cases, they have, but there are ones that have faltered on the market.

Here are the figures of re-sales:

  • Flat 18
    2015-09-17 £275,000
    2010-11-26 £307,450
    Loss £32,450
  • Flat 22
    2014-06-24 £305,000
    2010-05-28 £344,950
    Loss £39,950
  • Flat 24
    2016-01-13 £250,000
    2012-02-20 £235,000
    Gain £15,000
  • Flat 29
    2014-10-15 £250,000
    2011-04-06 £264,450
    Loss £14,450
  • Flat 30
    2016-03-07 £246,000
    2011-05-27 £230,000
    Gain £16,000
  • Flat 8
    2015-09-22 £238,000
    2011-11-25 £218,686
    Gain £20,686

Cavendish Lodge, in Clastonbury, Somerset, a complex of 38 flats, was built in 2006 by Churchill Retirement Living at a similar time to some of the McCarthy and Stone sites above.

It was towards the end of the property boom, and all re-sales are showing negative on the initial prices paid.

  • Flat 11
    2011-02-25 £135,000
    2007-01-17 £171,950
    Loss £36,950
  • Flat 12
    2012-08-31 £120,000
    2007-08-31 £169,950
    Loss £49,950
  • Flat 18
    2012-12-20 £153,500
    2007-10-19 £215,950
    Loss £62,450
  • Flat 19
    2016-04-01 £185,000
    2006-05-31 £199,450
    Loss £14,450
  • Flat 22
    2016-06-17 £81,000
    2014-05-23 £125,000
    2010-05-28 £129,950
    Loss £48,950
  • Flat 23
    2015-11-06 £175,000
    2007-02-20 £192,950
    Loss £17,950
  • Flat 26
    2015-01-23 £137,000
    2008-02-22 £174,950
    Loss £37,950
  • Flat 29
    2014-03-25 £175,000
    2006-10-12 £204,950
    Loss £29,950
  • Flat 30
    2014-10-07 £131,000
    2010-04-30 £159,950
    Loss £28,950
  • Flat 31
    2012-05-29 £155,000
    2007-04-05 £202,950
    Loss £47,950
  • Flat 32
    2011-11-28 £175,000
    2006-11-17 £214,950
    Loss £39,950
  • Flat 35
    2014-03-07 £140,000
    2007-05-14 £141,950
    Loss £1,950
  • Flat 36
    2014-06-20 £175,000
    2012-10-25 £160,000
    2007-04-25 £192,950
    Loss £27,950
  • Flat 37
    2012-12-07 £145,000
    2007-02-28 £193,950
    Loss £48,950
  • Flat 6
    2013-10-17 £118,000
    2006-10-12 £136,950
    Loss £18,950
  • Flat 8
    2014-03-28 £175,000
    2007-01-19 £194,950
    Loss £19,950
  • Flat 9
    2015-04-17 £152,500
    2009-05-01 £149,950
    2006-10-27 £173,950
    Loss £21,450

AudleyRetirementSaleValuesAudley’s Hollins Hall in Hampsthwaite, North Yorkshire, is decidedly more upmarket than both Risingholme or Dickens Courts.

Built in 2000, it is set on the edge of the Dales in 14 acres of gardens around a Georgian country house that used to belong to the Tetley tea family.

The old mansion acts as a club house for the retirement housing 71 flats, bungalows and cottages, and there are numerous communal facilities such as swimming pool, library, restaurant and conservatory.

The values at Audley Hollins Hall appear to be more robust, but there are still unaccountable variations and some falls. This is at odds with the small local property market in Hampsthwaite, where the average price paid is £422,778. This exceeds upmarket Harrogate nearby, according to Rightmove.

Here are some examples:

Audley Hollins Hall, Audley Retirement, Built 2000

  • 4, Tetley Court
    2013-04-18 £175,000
    2008-04-09 £190,000
    2002-11-10 £210,000
    Loss: £35,000

Number 6 Tetley Court has sold five times, and on three occasions for more than the original purchase price. But it was last sold for £10,000 below the price paid for it 16 years ago.

  • 6, Tetley Court
    2015-10-16 £95,000
    2007-08-17 £165,000
    2006-11-17 £144,000
    2005-12-13 £140,000
    2001-08-01 £105,000
    Loss: £10,000

On the other hand, with only two sales number 21 shows a rise:

  • 21, Tetley Court
    2014-12-19 £280,000
    2000-08-25 £210,000
    Gain: £70,000

The newer Audley site at Audley Clevedon, built in 2009 at Ilkley in West Yorkshire generally shows price rises, but again there are some small inconsistencies.

  • 4, Clevedon House
    2011-10-17 £310,000
    2010-04-28 £370,000
    Loss: £60,000
  • 12, Clevedon House
    2014-10-08 £355,000
    2013-07-31 £320,000
    2011-06-27 £370,000
    Loss: £15,000

The Audley site at Audley Willicombe Park in Tunbridge Wells, seems more copper bottomed, with no losses registered.

The site, built in 1999, is 67 apartments, penthouses, bungalows, cottages and lodges set in four acres of landscaped gardens around the Victorian villa Willicombe House.

Here is an example:

  • Flat 4, Willicombe House
    2014-11-04 £240,000
    2012-05-30 £225,000
    2011-01-04 £200,000
    2008-11-28 £195,000
    2004-06-26 £155,000
    2001-06-26 £155,000
    2000-11-14 £124,000
    Gain: £116,000

And at the last gasp of the property boom, someone paid this astronomic price for this retirement flat:

  • Flat 7, Willicombe House
    2008-09-22 £785,000
    1999-12-06 £265,000
    Gain: £520,000

RetirementVillagesResaleValuesRetirement Villages makes the same sort of offering as Audley at 14 sites around the country, which are retirement complexes usually set around pleasant country houses.

Blagdon Village is a purpose built village just outside Taunton, with club facilities, bar and restaurant, library and gym.

In all, there are 85 flats, bungalows and cottages, of two and three bedrooms, which were built in 2006.

Completed on the cusp of the property downturn there are inevitably some negative retirement housing values, like this one:

  • 81 Kinglake Drive
    2014-01-29 £240,000
    2009-12-11 £248,950
    Loss: £8,950

On the other hand, by 2015 prices should have been showing positive, but this one wasn’t:

  • 65 Kinglake Drive
    2016-02-22 £215,000
    2009-06-30 £237,500
    Loss £22,500

And this one, bought during the downturn and sold earlier this year should have increased by more than a few hundred pounds over six years:

  • Flat 48, Vivary House, Kinglake Drive
    2016-01-12 £195,950
    2010-03-08 £195,000
    Gain: £950

This one is more encouraging:

  • Flat 5, Middleway House, Kinglake Drive
    2014-08-07 £226,000
    2007-11-30 £202,000
    Gain: £24,000

RetirementSecurityCampaign against retirement leasehold exploitation applauds the efforts to improve the sector of retirement housebuilder of Bob Bessell, the founder of Retirement Security, based in Stratford upon Avon, who has built around 3,500 retirement flats.

But what is happening to the retirement housing values at its sites?

Pinner Court, in Harborne, in Birmingham, is 48 apartments that were completed in 1997. There are resident and non-resident staff and flats are one and two bedroom. The facilities are a lounge, restaurant, guest suite and hobby room / library.

Flat 1
2014-04-11 £180,000
1999-06-11 £101,500
Gain: £78,500

Flat 10
2012-02-20 £202,000
2011-02-18 £198,000
2008-08-29 £200,000
2007-10-19 £212,000
2003-09-24 £150,000
2001-04-06 £133,950
1999-02-19 £118,830
Gain: £83,170

Flat 28
2010-02-05 £190,000
2001-10-31 £137,500
1997-12-19 £105,500
Gain £84,500

And so it goes on. Today, not one flat at Pinner Court is registering a loss on its 1997 purchase price.

Of course, in the non-retirement sector it would be astonishing if there were any loss in value over these years.

Mr Bessell, who is 82, actually lives at Margaret Court, in Tiddington in Stratford-upon-Avon, a complex of 50 retirement housing flats that was built in 2009.

Flat 104 suffered a £5,000 loss during the property downturn, as do a couple of others sold in 2012-13:

Flat 104
2013-03-26 £245,000
2010-10-22 £250,000
Loss £5,000

But more recent data on retirement housing values are positive:

Flat 15
2015-10-15 £395,000
2010-07-23 £357,000
Gain £38,000

Flat 16
2016-06-10 £405,000
2012-04-19 £360,000
2009-10-21 £359,500
Gain £45,500

AnchorSalePricesThe Anchor housing association, the biggest in the country, has 230 purpose-built retirement housing sites.

Campaign against retirement leasehold exploitation chose at random the Easingwold site at Altrincham, in Cheshire, which is a complex of 30 flats built in 1987 with a part-time manager.

Retirement housing values from new – or from Land Registry records dating from 1995 – are modestly positive.

Flat 18
2015-10-12 £140,000
2000-10-26 £82,000
1999-05-28 £79,950
Gain: £60,050

Flat 20
2004-04-08 £135,950
2002-09-23 £125,000
1999-06-29 £86,000
1995-06-23 £74,950
Gain: £61,000

And one strongly negative value:

Flat 29
2013-12-02 £88,500
2006-06-02 £124,950
2002-10-11 £169,950
Loss: £81,450

PegasusLifePegasus retirement housing properties were slightly upmarket of McCarthy and Stone, but the then management did exactly the same thing by selling its freeholds to Vincent Tchenguiz, or rather the Tchenguiz Family Trust based in the British Virgin Islands.

It has now been revived by Howard Phillips, a former CEO of McCarthy and Stone, and has gone even more upmarket.

The portfolio, like McCarthy and Stone’s historic freeholds, are managed by FirstPort.

The sites are repetitively called Pegasus Court, and this small one of 19 flats at Eastbourne, in East Sussex, was built in 2002.

There are no resident staff, but there are guest facilities and a lounge.

All retirement housing values are showing a negative from new, although prices in recent years seem to be climbing back a bit.

Flat 10
2013-11-14 £137,250
2002-03-28 £183,259
Loss: £46,009

Flat 8
2015-07-03 £157,000
2002-09-30 £184,950
Loss: £27,950

Flat 9
2015-06-05 £144,950
2003-03-21 £199,950
Loss: £55,000

Comments

  1. The McCarthy Stone flat our family bought turned out to have been the worst financial decision ever.
    After a lifetime of prudent saving, it should have provided a serene, worry-free environment. However, it turned out to be anything but. Disputes with the freeholder (Fairhold) about the inflated price of the house-manager’s accommodation. Wrangles with the management company (Peverel) about inflated charges.
    And plummeting value.
    When we finally sold, after 10 years, it had crept back to a similar price to that we had originally paid – by which time, property values in the surrounding area had doubled. Effectively a £100,000 loss, therefore.

    But could fortunes be changing? The weekend papers reported:
    ‘Retirement house builder McCarthy & Stone said it may miss its growth target after seeing “some weakness’ since the Brexit vote. It said cancellations had increased and new reservations were coming in at a lower level in comparison to the beginning of the year.’

    Blaming it on Brexit? Perhaps a more encouraging conclusion is that word is FINALLY getting around!

  2. Hi Susan, nice to hear from you again.

    I posted last year that McCarthy & Stone developments had lost up to 40% of the value of purchase. Having said that, I recently posted, that over night, the local ex McCarthy & Stone 1 bed developments increased from £75k to £109k over night. Was this a collusive decision between Freeholder, Fairhold 7, Landlord Estate & Management, along with the local Estate Agent?

    Other developments where Fairhold and E&M are not involved, increased in value by up to 20% over the past ten years?

  3. Michael Epstein says:

    Suppose for a moment, that for whatever reason things get tougher for retirement development providers?
    Let us imagine the banks start putting them under pressure by either increasing their interest rates, requiring them to pay down loans or a combination of these.
    How long before the idea is floated of increasing revenue streams from leaseholders ,especially if the retirement development provider just happens to be connected with the managing agent?

  4. Jane Platts says:

    I bought a McCarthy and Stone assisted living flat for my mother in 2007 for £226,000. I sold it earlier this year for £135,000. As the previous lady said the worst financial decision ever made and I cant believe they get away with it.

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