June 17, 2024

Retirement leasehold is the worst property investment bar none!

Even one-bedroom flats in the centre of Leeds, which plummeted after the boom, hold value better than retirement leasehold.

The explanation? Greed, simply.

Retirement housebuilders, speculators who buy the freeholds when developers sell them off and management companies have proved unable to resist exploiting the weak and elderly.

Leasehold law (which is unique to England and Wales) is unfairly weighted in favour of the freeholder and numerous laws have been attempted to make it work.

The is redress through the property tribunals, but these are cumbersome and take time. They are also proper courts, and freeholders deploy clever barristers to trip up lay applicants.

Fortunately, Campaign against retirement leasehold exploitation is at last making serious progress with the politicians.

Private retirement leasehold is overwhelmingly a Tory issue – 73 per cent of Peverel managed sites are in Tory constituencies.

At present – October 2013 – there are serious leasehold retirement disputes in the constituencies of: George Osborne, Liam Fox, Chris Grayling, Oliver Letwin, Oliver Colvile, Mark Prisk (the housing minister) and even the prime minister, who had to sort out Windrush Court (search site).

Here are the well attested abuses:

Part-exchanging your house to buy a retirement leasehold flat. NEVER, EVER do this. These were revealed in Channel Four Dispatches of September 2012. More here

Selling off freeholds to speculators who monetise. Housebuilders are supposed to offer them first to residents, but this is easily worked around. If your freehold comes up for sale, try VERY HARD to buy it. Othewise someone unsavoury may do so.

Loading the management charges. This has been substantiated time and again in the courts.

Fiddling the insurance: freeholders load its costs and help themselves to commissions, which leaseholders have no right to know.

Monetising clauses in the lease: exit and subletting fees have to be paid to the freeholder. These were purposely introduced into the leases by the housebuilders to make the freeholds more attractive to sell on.

Cheating over contracts: Repairs, lifts, warden call systems are all a rich source of income … if you pad the bill. Peverel has admitted that its subsidiary Cirrus ran a bogus tendering process over warden call systems which resulted in pensioners being swindled of millions. The Office of Fair Trading is shortly to report on this, but Peverel will be dealt with leniently, as it admitted the practice and is co-operating with inquiries.

House managers’ flats: 1. Making residents pay notional rent for these properties which does not exist in the lease. Pensioners – notably Oakland Court in Worthing who won back £67,500 – have successfully overturned these charges.

House managers’ flats: 2. Selling these properties after residents have a ballot asking for a part-time manager. Many sites have been paid off with £10,000 into the contingency fund. But it is an open question whether these flats can be sold as they are part of the common parts of the site. Also, ownership re-assignments seem very dubious, and quite possibly criminal.

Obviously, the mass market of retirement flats attracts the most attention. But upmarket retirement leasehold, typically clustered around a nice country house, shows even worse abuses.

One retirement leasehold house, bought for £400,000 is on the market in East Anglia for £250,000. It has been empty for six years, resulting in £36,000 being paid in service charges.

Furthermore, there is a 12 per cent exit fee on sale, and as the freeholder can veto any incomer he can render the house completely valueless if he so wishes.

Why would he wish to do that? In order to re-possess it and sell it himself.

We have come across retirement flats for sale in north Oxford (at Charles Ponsonby House) where re-sale prices have been as low as £15,000. And they still don’t sell. Some have simply been handed back to the freeholder.

This is the Ministry of Justice (very poor) database for LVT decisions:

Also the Leasehold Advisory Service database here



  1. “Selling off freeholds to speculators who monetise. Housebuilders are supposed to offer them first to residents, but this is easily worked around. If your freehold comes up for sale, try VERY HARD to buy it. Othewise someone unsavoury will do so.”

    McCarthy & Stone/developer is misleading potential buyers of retirement property by deliberately using the word “owner” in their current TV advert and this should be reported as a complaint to the Advertising Standards Authority. This sharp practice sales technique is designed to trap vulnerable older people that are moving from a previously owned freehold home and don’t understand the complexities of leasehold.

    Peverel/managing agent also do this referring to residents as ‘owners’ (not leaseholders) in all of its documentation and instruct House Managers to do the same. The communal lounge is even labelled “Owners’ Lounge” deceiving visitors and residents alike.