July 20, 2024

Family ‘horrified’ at £30,000 price difference between new and resale Churchill Retirement flats


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Campaign against retirement leasehold exploitation has received an anguished communication from a family considering a purchase of a flat from Churchill Retirement at Elgar Lodge in Malvern.

It is priced at £172,000, but the family says it is “horrified” to discover a very similar resale flat in the same block, advertised by Churchill’s own management/ estate agency branch Millstream (and another estate agent) for £140,000.

The flat is described as under offer.

The family claims that the Churchill sales team has said that only three new apartments remain unsold. However, it is understood that seven apartments remain unsold, two of which are reserved.

Obviously, a resale apartment may have a different price to one sold new by a developer, which can be priced at whatever level a developer chooses.

In addition, the two flats are on different floors and, therefore, are not identical.

It is understood that the resale flat is an executor sale and has been on the market since July last year. It is believed the sale price has been reduced from £160,000 initially, to £150,000 in January and a further reduction to £140,000 in March.

This would have been the decision of the vendor, in this case on behalf of the heirs of the property, not Millstream.

Campaign against retirement leasehold exploitation has long expressed the view that new leasehold retirement flats carry an excessive premium and plummet in value – often to a far greater extent than is indicated here.

They can add up to a significant erosion of a family’s wealth, underlying the point that these flats are a lifestyle choice rather than an investment in property that will track the local market. Rental may well be a better option in some cases.

When comparing new retirement with resales, it is worth noting that an executor may be under greater pressure to secure a sale than a house builder – and in retirement housing almost all sales are on completed stock, rather than bought off plan.

In short, a retirement developer may keep flats on the market for longer than heirs to a property might be prepared to wait.

Service charges have to be paid on an empty flat and, for reasons that are so far unexplained, the retirement leasehold sector imposes draconian subletting fees into the contingency funds – usually one per cent of the purchase/market value.

This mean that a family with a relative requiring further care must pay service charges on an empty flat until an tenant is found; the further care costs; the letting agent’s fees … and one per cent of the purchase price/ market value of the flat into the contingency fund.

Understandably, there is incentive for heirs to get shot of these flats as quickly as possible, taking the hit on sales prices.

These subletting fees featured in Campaign against retirement leasehold exploitation’s discussions with McCarthy and Stone earlier this week.

They will certainly feature again when Campaign against retirement leasehold exploitation meets the members of the Campaign for Housing in Later Life on August 12.

It is unknown whether  Churchill Retirement imposes them at Elgar Lodge.

Although Churchill Retirement corresponded with Campaign against retirement leasehold exploitation on this issue, it declined to make a statement.


  1. ME, SOK, MB,

    Churchill Retirement, do they have an indirect or direct link to both Peverel Group and McCarthy & Stone?

    I recently commented regarding the fall in value of my relative, at Denehurst Court whose flat value has fallen by 46% since 2005/06.

    I believe 2 flats in this development have never been sold and the rent paid for the House Managers Flat is over £2,000.00 above the local rents paid for in the same development?

    The development was built by McCarthy & Stone, the Freeholder is Fairhome 7, using Peverel Retirement as Managing Agent.

    What is the implication of the value of a one bed flats dropping by 46% and the insurance cover required to rebuild?

    What is the implication if these developments were used as collateral for other loans, when they have now fallen in value?

  2. One other problem which can arise is that the flats are put in too high a band for Council Tax – based on the
    original inflated price. With the help of Fleeced I did get my flat rebanded from E to D but it took months to persuade the Valuation Office to agree it had been wrongly assessed. They did admit that other Offices had accepted Retirement apartments are sometimes put in too high a band. This is another reason to be very careful if considering a purchase.

  3. Michael Epstein says

    Churchill Retirement do not have a financial connection with Mcarthy& Stone, though former connections such as John Mcarthy and Clinton Mcarthy became involved with Churchill Retirement after leaving their former company. That an apartment’s value falls dramatically is of no consequence to the borrowings of the freeholder. It is the leaseholder who suffers.
    It could be the case for example that a Peverel retirement flat could be bought for £200,000 and sold to Girlings (the rental specialists for £85,000. Girlings have a close relationship with Peverel going back many years. Possibly the two became “friends” during Peter Girling’s time as director of Peverel?

  4. ME,

    Do you or other friends know of other developments, where the value has decrease substantially?

    Whilst house prices had fallen since 2008/09 as mine did by 20% in 2088. I have since checked the value of my old house and whist not yet worth what I sold it for, it should by next year surpass the value?

    I state again that the problem begins with us elderly who listen to Estate Agents and Solicitor’s who will do any thing to sell property?

    • Chas,

      We bought a new two bed MAC/STONE flat in 2007 for £235,000 according to several local estate agents it is now worth £170,000 (merseyside area) What a drop i don’t think anything in the residential property market has ever had such a profound decrease in valuation.

  5. Michael Epstein says

    Though I accept that it is not in the strictest terms correct, those considering buying a retirement apartment, should treat their “investment” as if they were buying a time share.As with time share many of the problems with selling are common to both.
    Anyone buying a retirement apartment should realise that the values are artificial. They combine facilities with the value of the apartment (yet you are paying for their facilities via the service charge) They should also be aware that unlike a freehold property if bequeathed to a child a retirement apartment can financially cripple the child.
    As a way of living, a retirement development can be very good. As an investment it is an unmitigated disaster.

    • Michael Hollands says

      Can anyone please answer this question.
      If M&S are selling new apartments 15% above the true value why do they lose money doing it.
      I know they pay high prices for the land as they are always in a prime position.I think the true value depends a lot on the demand in the area they are built.
      In the Nottingham area there is a shortage of this type of accommodation so highly price new developments would sell quickly and even Resales would hold a good price.
      The only thing that would bring the resale price down would be bad management to a particular complex.

      • Michael Hollands says

        Just one further comment on this.
        These retirement apartments are selling new at an average price of around £200,000.
        One Beds at under £200,000 and 2 Beds at well over..
        If M&S sold 1500 units last year each one at an average of 15% over the true value how can they make a loss.
        1500 units x £200,000 x15% = £45,000,000
        This is a return of £45,000,000 over what they would recoup if they were selling non retirement apartments.
        So where does all the money go.

  6. Michael Epstein says

    Michael Hollands,
    Of course they can make an operating profit (presuming they can sell all the apartments in developments they have built) however, as was the case with Peverel, Mcarthy & Stone are still saddled with crioppling levels of debt. Though much of the debt has been rescheduled ater the latest rescue, it is believed (as is typical for such rescues) that Mcarthy &Stone are liable for penal rates of interest to finance the whole loan structure, This can easily turn profits into losses.

  7. We moved into a new McCarthy & Stone apartment 2 years ago Although the price of the house we sold in the same area has increased by £50,000 our apartment has plummeted in value between £25,000 and £30,000 Many who bought the apartments when they were first built 5 years ago are losing between 30 & 50 thousand plus the agents fee etc Leasehold property is not a viable proposition and it
    is time the government intervened All property should be Freehold The losses made could make it very expensive for the government if home owners need to go into a care homes with so much money being lost

  8. Michael Epstein says

    G. Farley,
    Rather than a retirement property, it might be a more viable investment to find a good quality hotel to live in It would certainly cost less than the near £100,000 the last 5 years have cost you!