March 20, 2019

Should my 90-year-old mother move into a retirement leasehold flat?

Perhaps regular readers could answer this.

I am considering persuading my 90 year old mother to sell up and move closer to the rest of the family.  I have been looking at two retirement homes in XXX, both operated by Peverel.  Having discovered your site you can imagine my disquiet.

However, all the actions seem to relate to past problems because they take years to resolve.  Are Peverel a reformed organisation today or do new problems continue to arise.  Could you point me towards any items relating to recent events.

Naturally, I will be going back to see if there is a residents association and probe into the history of service charges, their accounts (if they will let me see them) and the current transfer charges.

Congratulations on your actions to date – I didn’t realise leasehold was open to so many abuses.  Keep up the good work.

Comments

  1. Rent – do not buy. Retirement flats can be very difficult to sell and prices fall. I suspect if you ask you will find people in the blocks in which you are interested, who would be only too happy to have your mother as a tenant.
    This is the way to go . Please do not buy – retirement leasehold is just a waste of money.

  2. Rent, Rent, Rent,,,, Do not buy a retirement leasehold property, you may live to regret it or you may not live that long as disputes can go on a bit 🙂

  3. OMhostage says:

    You’d be out of your mind to buy in any development run by Peverel and well advised not to consider leasehold property at all.

  4. michael hollands says:

    If at all possible try renting in one of the two complexes near to where you live.
    If none are available make the following checks on the retirement properties.
    1 Compare the current sales prices with those of previous years. They may have now reached rock
    bottom.
    2 Check the exit fee % as this can vary and in some cases is nil.
    3 Check that the sinking fund is in a healthy state and there are no expensive works pending.
    4 Speak to some residents, both on or off the Residents Committee to get their opinions.
    5 Speak to the Manager/Manageress to see if she is open and honest when answering your questions.
    6 Check the state of the communal areas and the building generally to see if it is well maintained.
    7 Are there many empty flats and how long have they been for sale. This can be a good guide.
    8 Check the cost of the Management/service fees and ground rent . Compare with other complexes.
    9 Will you be able to park your car when visiting your mother.

    If you find the answers to these sort of questions are satifactory you then have to decide what you would like for your mother. Is it worth the aggravation you may endure as a result of your purchase.
    Your mother may be perfectly happy there and the cost will be far less than using a care home.

    • Many adult children of elderly parents mistakenly think private sheltered housing category 2 is a type of care home. The part-time House Managers are not responsible for any care services; it is normal independent living.

      I wouldn’t even bother researching all the rip-off charges; service charge/ground rent, exit/transfer fees, building insurance, entryphone system, numerous hidden charges etc…

      And you will very likely end up with a flat you can’t sell, or have to sell at a rock bottom price. If you were stuck with the flat you still have to continue paying the service charge/ground rent. Letting is difficult as Peverel levy a charge for that! My message is – NO NO NO – do not buy into the Peverel nightmare.

  5. All good advice, but No 5. ( House Manager ) is something to be wary of. In my experience they are not impartial – they will always protect their employer ( Landlord/Management Company ) which in turn protects their job. I believe they are well trained, cleverly programmed robots.

  6. Michael Epstein says:

    Personally i am in the rent camp until the scandal that is at the heart of owning a retirement property is rectified. Both problems encountered by Peverel and Mcarthy and Stone residents are well documented, as are the nightmare stories of those who have been left a retirement property.
    Without any intention of causing any distress, i feel your mother’s age should be a factor in your decision to rent or buy.
    Whatever you choose, may your Mother be happy and healthy

  7. michael hollands says:

    Surely it is a case of priorities. Nobody is going to let their dislike of a management company prevent them taking the best decision for their mother.
    If what is needed is a comfortable local apartment for mother, then it my well be worth exchanging that for a thousand or two pounds for being caught in a scam.
    If the prices are now a rock bottom they may well rise in a few years,with improvements in regulations or an improvement in the managements performance. Or even the disappearance of the management company.
    Then the profit on the sale will pay for the scams and the exit fees.
    The weekly rent will be at least £150 compared with around £50 for owners management fees, so there is a lot to consider.

    • Trevor Bradley says:

      I cannot believe what MH is saying.
      When making a descision I should ignore the fact that I dislike the management company?
      If its ok for my mother to live in I should ignore any money being stolen from here/us? – escuse me but I have not grafted all my life to have my money stolen off me
      The profit on the sale will pay for the scams!! – escuse me but should not any so called “profit” belong to mothers/family fund – not thieves.
      There is no “real profit” on these type of properties anyway. If bought in London area in 1988 for £80K and now sold for £185K is a massive loss in real terms.
      If you bought a small 2 bed house at same time it would now sell at far more thn £185K

  8. Michael H,

    With all due respect, you are assuming quite a lot when in comes to price rises in the retirement leasehold market.

    This market has been damaged beyond repair… remember Time Share!! It is the same thing.The same business model of ownership and management regimes. It is no great secret that a lot of these distressed properties that go to market are bought secretly by the landlords who hope in time to cash in and sell at a later date when they have bought either all or the vast majority of the estate/development!

    Retirement properties that are not 100% managed and owned by the leaseholders are no different what so ever.

    Hand on heart, would you actually buy a property for your 90 year old mother that could take 10 years plus to sell for what it what bought for when the time comes to put it on the market? I think not…..

    • Trevor Bradley says:

      If you follow the advice of Karen, OMHostage and fleeced you will be doing the right thing

  9. micheal hollands says:

    Already done it with my own mother.
    After she died the apartment sold in one month at a profit.
    She spent her last 8 years there and was very happy. The service charge was low and as far as I could see no fiddles.
    Good company,secure premises and a big saving from the large old house she previously lived in.
    Of course she would have had no idea if she was being overcharged and I suspect the majority of current residents are in the same position.
    As I have said it needs a lot of research and consideration.
    Many of these properties sell quickly, even Peverels, if they are in a good situation for services.
    Prices over the last 10 years or so can be checked as well as the period they have been for sale.
    If there is absolutely no alternative thenif it was me my mother would come first.

    • Michael H

      It seems the time your mother lived in a Peverel managed flat in better times before the recession hit and the down turn generally in house sales. The leasehold retirement sector was hit the hardest and in 2007 when you know who bought the freeholds and the building insurance commissions sky rocketed to pay off his loans it all went sour and has never recovered. For this desperate financial situation to drastically improve it could take a decade away at least.

  10. Which site did your mother live in and when did you sell?

  11. michael hollands says:

    I have investigated the prices my mothers flat sold for both before and after her occupation.
    London suburb

    1988 when new £80000
    1991 £62000 Down in value
    1995 £167500 Up
    2007 £180000 Up
    2012 October £185000 Up

    I think that this proves my point that if the property is in a good area for the elderly then it will sell. Particularly if the local elderly live in large older properties. Yes even if they are managed by Peverel.
    I think the original correspondent needs to do a lot of investigation and give much consideration before he decides.
    Do not take notice of me or any others who do not support this type of lifestyle.

  12. Very surprised by rise in retirement flat prices even in London from 2007-2012. It is possible, I suppose, but it is not my experience.

    Are you referring to the developer’s prices,or re-sales?

    EVERY retirement site I have been in touch with demonstrates a significant fall from peak values. The most extreme: a one-bedroom retirement flat at Charles Ponsonby House, run by the Wyndham Housing Association, in Summertown, north Oxford. You can read about it here:

    http://www.dailymail.co.uk/property/article-1354186/MARKET-WATCH-The-15-000-flat-fees-9-300-year-surprisingly-buy-it.html

    The only (partial) exception were freehold houses on a managed site Windrush Court, Burford, Oxon, in David Cameron’s constituency. Here prices had held, although that did not stop a major row with Peverel/ Tchenguiz breaking out over the costs of the managed parts.

  13. michael hollands says:

    Yes they are resale prices the complex was built in 1988 managed by Retirementcare who were taken over by Peverel around 15 years ago.
    Todays news is an increase in property prices over the whole board in all areas of the country.
    Two possible things which may have helped put the price up are.
    No Exit Fees and modernization of the Kitchen and Bathroom.. These are the kind of things your original correspondent should look out for
    Near to Nottingham is the very popular area of West Bridgford. Here retirement apartments sell very quick whether or not they are Peverel.
    Good shops and facilities,easy transport to Nottingham centre and a major University Hospital.
    Walking distance from 2 football league teams,rugby premier League and Trent Bridge cricket.
    Who could ask for more.
    In West Bridgford the selling price of these properties fell 25% from 2007 to 2011.
    From 2011 to 2013 it has increased 15%
    In other less popular areas of Nottingham the fall from 2007 to 2011 is the same 25%.
    with no change from 2011 to 2013. And they are more difficult to sell.
    So ,as I say a lot depends on the position and facilities available.
    There are many eldery lwithout relatives or help who need this type of lifestyle so there will always be purchasersand they will go for the best available.
    It is up to all of us campaigners to persuade the Government, ARMA, ARHM, the Freeholders, Management Companies etc that the current situation is just not good enough.

    • I note you said your mother sold a large house and with the proceeds she never bothered to check what Peverel was charging. We have a number of those living here with that attitude. This is how Peverel has traded for so long ripping off all these merry widows. I asked a sales rep if many people did ‘part-exchange’ and her reply was: “Oh, yes, we get a lot of widows who have never written a cheque in their lives”. Says it all really.

      • michael hollands says:

        The complex was managed by Retirementcare, the management fees were reasonable and there were never any dubious add on.
        Te very on the ball Residents Committee made sure of that.
        One of the reasons my mother purchased was to get security and be away from the cowboys who pester the elderly who live in large old houses.
        It is dificult to put a price on peace of mind and security and this is something i think you ignore.
        The best thing we can all do is stop arguing amongst ourselves a all work in persuading the Government and other Organisations to improve the Leasehold situation.

        • “The best thing we can all do is stop arguing amongst ourselves and all work in persuading the Government and other Organisations to improve the Leasehold situation”.

          No one is arguing. Contributors are simply writing the truth. As long as a Conservative government is in power nothing will change.

          Watch Barbara Ehrenreich on YouTube who attacks the Positive Thinking ideology (no negative thoughts and ignore what’s going on) that started in the US and brought down the banks and the housing market.

  14. Trevor Bradley says:

    Do NOT Do NOT have anything to do with Retirement Leasehold. After 20 yrs experience of it with my mother in one I could write a book. It is NOT just Peverel, there are many others that are just as bad. I have uncovered large “scams” where mother is (Kenilworth Warwickshire) and after two years of full time fighting got nowhere with them. Taylor Wimpey was the Landlord, they also appointed this MA. When I proved the scams they did nothing to help, or get £25K back, other than change the MA to another one of their “approved” MAs. I even had threats and “gagging order” forced on me. The current one is just as bad and Tay W have now sold the Freehold and discreetly slipped away. Nice one Tay W.(it was offered to residents 1st but they are all too old to cope).
    I live in an apt block of 18 and it is Freehold owned by ourselves – no probs, runs to perfection.
    If you want mom near the family buy a freehold ordinary bungalow for her and if she needs any assistance have “carers” or similar come in twice a day.
    My wife and I are no more than “average” when it comes to wealth and you will never see us going into reirement leasehold. Only do it if you have money to burn, you are happy for MAs to steal money from you and you don’t mind selling your original investment (flat) for absolutely zilch

  15. Michael Epstein says:

    This question has certainly started a lively debate.
    I suppose the advice must be the same as i was given when buying a tie.
    CRAVAT EMPTOR!

  16. michael hollands says:

    To the original correspondant who asked the question.
    Just do what you think is best for your mother.

  17. I asked the original question. I didn’t expect it to be posted but thanks to everyone for your comments and advice.

    I didn’t find a privacy statement on this site so I hope I’m not going to find my spam file (or worse, my inbox) filled as a result.

    I was already aware of the depreciating value of a lease though, with over 100 years to run, this should not be too much of a problem. I was completely unaware of the abuses but, as soon as I began to read this and other sites, the potential problem became obvious. However, looking at the headcount for the operation and estimating maintenance costs it seems within a factor of 2 of reasonable. Also, they only went up 2% last year. Fortunately, my mother has a good sized house to sell and, at the age of 90, is hardly likely to run out of money. One day I must tell her she was likened to a Merry Widow – that will amuse her.

    I am in the position of being able to think in terms of where she will be happiest and where she will be best looked after. It irks me to think I may be scammed and my parents’ hard earned siphoned off, but it may be the price that one has to pay. Not sure if her grandchildren will all see it like that.

    The three newest homes in the area are all Peverel managed and all leasehold. There are two rental establishments but they are much smaller “studio” apartments (in other words, bedsits) which wouldn’t go down well. However, they are much cheaper, the rent being less than the Peverel service charge. What I have not found is any of the leasehold properties that were bought-to-let and are now available for private rental.

    However, my father would turn in his grave if I didn’t preserve my mother’s capital and do the best deal possible. Consequently, I intend to offer to rent some of the ones that are up for sale. Maybe I’ll get someone to sub-let rather than sell. I suppose that if I can get a rental deal that is less than the service charge plus a reasonable return on the asking price, my father can rest easy.

    Once again, thanks for the comments. If anyone wants to add to the above, especially what would constitute a fair rent for a property up for sale, I will be pleased to read it.

    Ray

    • You are not going to receive spam as a result of leaving a comment on Campaign against retirement leasehold exploitation.

      I anonymised your email so I don’t think it is an issue to publish it. (Worth recalling that you did email me requesting additional advice that would not have otherwise been published, which is not much use to anyone else.)

      It is a useful issue to air for many people in a similar position.

      My advice on sub-letting would be suggest to the owners that you pay the service charges / council tax directly, which means the designated property rental would be quite small.

      As the freeholder will be able to charge a sub-letting fee – in some cases an outrageous one per cent of the purchase price (in some cases this was dealt with in the OFT/ Tchenguiz Family Trust deal (see ‘sub-letting’) – paying in this fashion will be much more acceptable to a reluctant retirement leasehold flat owner. This is being done as a work-around for sub-letting fees.

      I don’t recognise the market Michael Hollands is describing. I would like to know the name of the retirement development in London where prices increased between 2007-2012.

      If we head for another bout of property price inflation, it is possible retirement leasehold will be dragged upwards. I doubt this, given its reputation. (Obviously, asking prices for new stock from developers are all smoke and mirrors and indicate only what they would like to get for a product.)

      But there are plenty of buyers for whom the price paid and the capital erosion are not primary considerations.

      Many times I have spoken to people who say in effect “we know we are being ripped off but my mother’s happy so we are not going to make a fuss”.

      You should be aware that those involved in this market are sophisticated business people who have analysed every nuance of the issues involved in re-housing an elderly relative.

      The outrageous leases – exit / sub-letting fees / vagueness over house manager’s flat – were carefully written for maximum ongoing revenue. When McCarthy and Stone sold its freeholds these revenues boosted the ground rent income considerably.

      Similarly, decent conveyancing solicitors have warned buyers many times of what lurks in these retirement leases. (Of course, there are plenty more who have done nothing of the kind or – if you are mad enough to use them – those recommended by developers who won’t highlight any issues at all.)

      • Trevor Bradley says:

        Spot on with your comments Campaign against retirement leasehold exploitation Quote, Many times I have spoken to people who say in effect “we know we are being ripped off but my mother’s happy so we are not going to make a fuss”.
        This is one of the major probs on why there is not more support to get retirement Leasehold changed.
        With no disrespect to the OP (Ray) even his comments “that his mother is unlikely to run out of money” are worrying to me. In essence he is condoning the abuse/theft of his mothers money by being prepared to “buy in” to these scams. You are still contributing even if you rent.
        In the longer term things will only get worse unless changes are made by the government.
        These retirement leasehold will become worthless and extinct. The next generation won’t even have enough pension to live on let alone ever be able to think of living in these places.
        The best of luck Ray but, when the time comes, I shall be moving into an ordinary freehold bungalow and when I need help “carers” will have to be called upon.
        Don’t forget, even with a live in HM they only do approx 9am to 5pm hrs. If you are having a heart attack at 6 pm and pull your chord/lifeline the HM does not come as the call goes to a central control who then send ambulance etc. The HM does not even know you have a prob.

        • TB – when you buy your freehold bungalow you can also rent an emergency 24/7 care call system – FAR CHEAPER THAN CIRRUS!!!!

          • Trevor Bradley says:

            Yes, as you say fleeced, I certainly can get my warwickshire lifeline for approx £55 per year and they have an excellent reputation. And the bonus when I am gone is that my family will easily be able to sell a stand alone freehold bungalow for the correct current market price. And no service charges to find either!!!

  18. michael hollands says:

    Dear Ray
    Pleased to hear the various comments on this website may have been a help.
    Girlings who rent out Peverel managed apertments ( look at their web site) make the following approximate charges.
    1 Beds £640/750 month
    2 beds £750/850 month
    This compares with approx £200 and £250 momth if you were to buy one.
    Either way your mother will be in a Peverel managed complex and you will be able to join in the fun.
    You will be able to give yourself an appropriate name like “SHAFTED” join the Peverel Rebels and tell us all about it on the Campaign against retirement leasehold exploitation and Peverel Action websites.
    On the other hand your mother may be very happy there and join in the EAC vote for the Retirement Complex of the Year getting Peverel another Gold Award.
    In fact both these thing could happen simultaneously.
    Please let us all know what happens.

  19. Michael Epstein says:

    Ray,
    You can be assured that the very essence of this and other sites is that complete confidentiality is maintained.. So you need have no fears about spam, or anyone knowing who you are.
    Before you make a final decision, have a look at BBCTV Breakfast News.
    Watch the interview with [EDIT …] from Peverel in which he describes Peverel customers as “Dribbling Geriatrics” Then decide.

    • ME – not quite right – Ian Rapley was the name; he referred to retired leaseholders as “Dribbling Geriatrics”. I think Bagley was the legal adviser behind the rip-off leases?

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