December 15, 2017

Resale disaster zone: Burlington Court in Bridlington, where one flat has sold for £36,000

5 flats sold for less than £50,000. 12 flats less than £60,001

Burlington Court features on BBC R4 MoneyBox today. Resale values have been dismal, so will the new block being built by McCarthy and Stone up the road fair any better?

The dismal state of retirement flat resales is starkly illustrated by figures from the Land Registry concerning Burlington Court in Bridlington.

Five of the flats here have been sold for less than £50,000; seven of the flats have sold for less than £60,000.

The site was only sold out by McCarthy and Stone ten years ago.

The leases are 99 years with ground rents of £486pa.

McCarthy and Stone is now selling Chestnut Court, two miles away, with prices of £167,000 to £174,000 for a one bed; £199,999 to £249,999 for a two bed.

Burlington Court features on BBC R4 MoneyBox and BBC TV today.

Half of new-build retirement homes sell at a loss

Around half of new build retirement homes sold during a 10-year period were later re-sold at a loss, according to exclusive research for the BBC. The research by the Elderly Accommodation Counsel charity found falls in value could be more than 50%.

The BBC R4 MoneyBox quoted Ken, 91, who bought his flat in Burlington Court for around £180,000 in 2008.

“I thought when I bought this that if I lived for another five or six years, my children would get maybe £190,000 for it,” he said.

“In actual fact they’ll be lucky to get £70,000 for it, maybe even £60,000.

“It’s criminal really. When I mention it to other people, they say: ‘Why should you worry, you won’t be here?’

“But I do feel my son and daughter have lost out. It’s a lot of money,” he added.

Margarete, 92, paid nearly £150,000 for her flat eleven years ago. She sold a detached bungalow in York.

Click image to link to BBC iPlayer to hear BBC R4 MoneyBox

Like most residents of Burlington Court, she says it’s a nice place to live, with a nice community of people.

But Margarete says she’s always wanted to move back to Germany, where she was born.

However the value of her property means that isn’t now an option.

“My friends in Germany always wanted me to go back.”

“But if I get £40,000 for this flat I’d be lucky. I couldn’t afford to go back to Germany and buy a place there.”

Will Chestnut Court in Bridlington fair any better with resales than Burlington Court down the road? The company says ‘yes’, because of its recent improvements.

McCarthy and Stone provided the following statement earlier in the year to www.BetterRetirementHousing.com:

Burlington Court is a Retirement Living development in Bridlington in North Humberside, which opened in mid-2006. It has been managed by First Port since this date.

We were disappointed by Burlington Court’s sales performance at the time as it took much longer to sell than expected.

In part, this was because of the low car parking provision provided on site, which was lower than normal at the time due to the nature of the site’s layout and the conditions required by the local authority (totalling 14 spaces for 36 units).

As you know, one of our major focuses in recent years has been on increasing parking ratios in our developments as many of our customers have increasingly retained the use of their car, and this has had a positive impact on more recent sales.

The site was also challenging because of its location within Bridlington, and the local area is seen to be one of the less in-demand locations in the town.

It is immediately adjacent to some disadvantaged areas which sadly do not have a positive reputation in the town.

Another reason for the challenging sales conditions was the fact the site opened at the peak of the housing market which quickly became the national recession that hit in 2007/8.

At the time, our average sales period for a typical development was around three years, and this unfortunately coincided with the downturn.

As a result, the site didn’t sell out until 2011 and this had a big impact on the prices that we were able to achieve. Again, as you know, our sales periods have since improved substantially, as we have improved our product and market conditions have got better.

We now achieve 50% of our sales off plan on average and target selling out in full in 12 months, which helps to create good forward momentum for resales.

Looking at the home.co.uk report (see link), prices for flats in Bridlington between July 2006 and October 2016 (the latest data point) show that local prices have not recovered since the recession, falling 25% of average, which explains some of the drop. http://www.home.co.uk/guides/house_prices_report.htm?location=bridlington&startmonth=07&startyear=2006&endmonth=10&endyear=2016

Because the site proved to be so difficult to sell due to the above reasons, we were required to offer significant incentives to support the purchases.

These averaged c£15,000 per apartment (or around 10.5% of the Land Registry price), in addition to a number of shared equity deals, and should be factored into the prices as the incentives are not included on the Land Registry data (which only records total price paid).

With regard to Chestnut Court, which is now selling in Bridlington, this new development has fewer apartments and features our latest specification, which, as you know, has moved on significantly in the past 10 years.

It has a much greater share of two-bedroom apartments, more car parking spaces (as mentioned above, and is close to 1 space per apartment with 29 spaces for 32 units), en-suites, walk-in wardrobes, and extensive landscaped grounds.

We have also made significant improvements to our leases, included introducing 999 year lease periods.

In addition, the new site is located in Martondale, a suburb of Bridlington which is one of the most in-demand areas of the town, and this gives us confidence that the development will perform well in future years.

We also now provide all management services in-house and are the head-lessee on all new developments, which means no third party is involved in our developments.

However, we appreciate these changes do not benefit the homeowners at Burlington Court.

While it is of course disappointing to see examples of developments where prices have fallen, this is not always the case.

The majority of properties managed by McCarthy & Stone have increased in value when resold (based on data relating to managed properties resold in 2016) and historical data suggests around a third of all our properties outperform their local market.

A number of other points were made in our more detailed response to you on resales, which notes the typical premium paid for new build retirement properties (of around 10-15%) and the lifestyle benefits offered by retirement living, and is on your website here.

Both First Port and McCarthy & Stone offer resale support (through Retirement Homesearch and RetirementMove respectively). If either of these services would be helpful to the homeowners at Burlington Court, please let us know and we can arrange for them to contact the residents.

Here is the full Land Registry data on Burlington Court as of September 9 2017:

1, Burlington Court
2006-12-18 £208,790

10, Burlington Court
2011-10-14 £115,000

11, Burlington Court
2006-06-30 £175,950

12, Burlington Court
2008-05-22 £142,950

14, Burlington Court
2007-08-07 £148,590

15, Burlington Court
2008-07-31 £158,950

16, Burlington Court
2006-09-06 £141,950

17, Burlington Court
2014-02-28 £69,950

18, Burlington Court
2006-08-18 £145,450

19, Burlington Court
2015-01-16 £40,000
2009-08-24 £121,950

2, Burlington Court
2016-01-28 £36,000
2009-06-26 £124,950

20, Burlington Court
2015-06-26 £58,000
2007-09-03 £143,450

21, Burlington Court
2009-06-22 £155,950

22, Burlington Court
2007-09-03 £199,950

23, Burlington Court
2008-05-30 £173,950

24, Burlington Court
2009-08-21 £114,950

25, Burlington Court
2010-09-03 £122,950

26, Burlington Court
2015-08-28 £56,000
2013-01-10 £60,000
2006-12-21 £136,575

27, Burlington Court
2014-09-26 £40,000
2007-05-31 £135,950

28, Burlington Court
2015-06-17 £40,000
2006-07-28 £121,582

29, Burlington Court
2011-10-28 £114,950

30, Burlington Court
2008-10-24 £168,950

31, Burlington Court
2013-04-03 £60,000
2009-11-30 £148,950

32, Burlington Court
2006-06-30 £138,450

33, Burlington Court
2016-08-01 £58,000
2009-08-21 £140,450

34, Burlington Court
2007-02-28 £193,075

35, Burlington Court
2006-07-28 £176,950

36, Burlington Court
2006-07-28 £134,450

37, Burlington Court
2016-08-22 £39,999
2007-05-31 £136,950

38, Burlington Court
2011-06-07 £124,950

4, Burlington Court
2015-07-17 £56,000
2008-03-20 £147,950

5, Burlington Court
2014-09-23 £59,000
2008-08-18 £128,000

6, Burlington Court
2007-08-31 £141,620

7, Burlington Court
2013-09-04 £66,500
2010-09-03 £185,950

8, Burlington Court
2013-10-02 £75,000
2007-12-10 £164,950

9, Burlington Court
2008-05-22 £139,950

Comments

  1. The McCarthy and Stone Excuse Book 101 – This mob have every excuse going and quite frankly keep inventing them to pass off the over inflated sale prices of the properties. The problem is that the people buying the flats/lease see the retirement market as assets just like the residential market. They are unaware of the massive losses in resale, so are willing to pay residential like prices at the outset. Of course nobody would pay the prices of new build if they new they are likely to plummet.
    Excuses range from; local agents are to blame for not understanding the market, the 2008 recession (90% of non retirement properties recovered to 2006 values by 2014), buying new is like buying a car you pay for the first owner premium rather than to make capital gains (the reverse of residential property ethos), there’s dozens of more excuses for each development just like the ones in the article response if you question them directly.
    There`s a new one though, not enough car parking causes 50% fall in value!! Well who accepted the design layout and had knowledge of that but still sold at the inflated price?

    McCarthy and Stone logic is often counter intuitive. They claim prices are low historically in the area and provide the link to prove that. If we believe the data to be correct (is it?) why were they selling flats at double the average rate in 2006 (£88k vs £160K)? Accordingly, the same question to why they are selling at prices now double than the 2016 average (£79k vs £174k)? Clearly, the properties are over valued. You’re going to get stuffed by them again. The sale values have NOTHING to do with the facilities at these sites. Everything is charged for within the service charges and contingency fees.

    Remember, that when these pensioners may have to go into care and their diminished pot runs out, its you the tax payer funding the care because McCarthy and Stone have pocketed the rest! Imagine £160k for care versus £60k for care, it soon runs out.

    McCarthy and Stone just see pensioners as cash cows, too old to fight back under ancient feudal laws. They are the ideal victim in this scam market lining the money markets and freeholders pockets. They claim to be providing homes but to us now aware of this thieving market of developers and freeholders in the BVI, we know it is making millions out of pensioners.

  2. Michael Epstein says:

    And what of those tempted to pay extra for facilities such as a live in house manager, who now find that the live in house manager has gone and the managing agent just happens to hold the lease on the house manager’s flat (though due to an oversight forgot to mention it to residents) and then profits from the sale of the flat?

  3. Michael, Well said

  4. Does the MP for Bridlington constituency know about the situation at Burlington Court ?

    The 36 leaseholders at Burlington Court and their families / grown up children , beneficiaries in their wills should be asking their MP ( Greg Knight ?) to join the APPG and contribute his personal efforts put an end to Leasehold system at Burlington Court. .

  5. If your tech support vendor is directing that you download Linux OS as
    ISO file, be sure you possess a fast net connection with your system.
    The mouse’s motion is translated by way of a cursor that is displayed on your computer screen.
    People understand this details about you whenever you visit certain websites where
    they track their user’s activities.

Skip to toolbar