April 24, 2024

Taking over from Bob Bessell as head of Retirement Security retirement community provider: What we offer and why

Melanie Gowers is the newly appointed chief executive of Retirement Security Limited, a retirement housebuilder founded by Bob Bessell, a trustee of the Leasehold Knowledge Partnership
Bob Bessell, a former head of Warwickshire social services, became a retirement housebuilder and set up Retirement Security. He has undertaken to leave the freeholds to his sites in trust to the leaseholders who live there. Now in his eighties, he lives at a retirement site he built in Stratford upon Avon.

By Melanie Gowers, CEO Retirement Security

I’m Melanie Gowers; as the CEO for Retirement Security (RS) I’ve been asked to offer some insight into our Independent Living, Retirement Housing model; associated risks now and in the future.

In 1983 our founder concluded that there needed to be an alternative to care homes and nursing homes – the only options for supported later living at that time and ones which denied older people who could have still lived independently, of that right to do so. By establishing a new model he offered that independence within a community supportive environment – THUS Retirement Security was born!


Our model is based around right to manage, with RS as Freeholder – (post the sale of the new properties – development profit did not benefit RS), and as Freeholder, we are acting as the management agent.

Our Residential developments are known as Courts. Each Court is registered as a Limited Company with a Board of Directors who represent the individual leaseholders, who all own a share in the limited company. In addition, each Court has shares in RS which allows for the Courts to have a say in how RS operates.

RS currently is the freeholder of 32 Courts with an average at each Court of 50 properties. These are a combination of apartments and bungalow, located throughout the country from the South, Southwest through the Midlands and East to Northwest England, with one Court in North Wales.
This broad geographical dispersion gives RS an equally broad range of property values and demographics. For example our property values range from below £100k to over £750k and therefore can meet the needs of the wider community.

RS acts as managing agent for 26 of these 32 Courts. The management fee passed on by RS is to cover only the costs of providing the management support.

Whilst RS supplies the model, each Court runs autonomously and appoints its own Directors from within the Community. RS supports the Directors and oversees the appointment and management of a qualified Court manager who in turn manages the business and on-site team. The Courts make final decisions around the budget but are supported by RS, to keep up to date with best practice and legislation. Our model is based around 24/7 support 365 days of the year.

If Owners are doing well ……we’ve done our job.

As a philanthropic business RS has operated without the need for ground rents since the inception of the model. Thanks to the tenacity and great work by the LKP The Leasehold Reform (Ground Rent) Act 2022 puts an end to ground rents.

To function RS operates a 3% Transfer Premium on resale value – in the main this TP goes toward the management and marketing support to the Courts with roughly a 1/3rd of this going into a reserve for future development.

2023 What is the ideal model for when we develop our next site?
We are selling a Lifestyle – not bricks and mortar . A Potential owner/leaseholder is buying security – the ideal outcome for later living and most importantly … are not alone!

Commonhold does not work for our business model of Independent later living within a supportive community. Commonhold would leave Owners living independently but entirely on their own.

What price can you put on peace of mind, community, support, security; how do you tackle loneliness? You can ask current owners if they are pleased to have made the decision to downsize and move into one of our courts – the answer: “wish we’d done it years ago”.

However, the retirement living landscape is now different and changed greatly since RS started. We were an early adopter, a Pioneer…. at the vanguard of the model – Independent living within a supportive community. Now, the later living model is being taken further with many different operators and models.
Many offer Deferred Management Fees (DMF), which are designed to maintain affordable service charges and funds for future maintenance, in an attempt to make living within this model affordable today. This model utilises the equity of their homes they are living in to offset the deferred portion of the fees; thus ensuring peoples’ pensions and savings are available, to really enjoy their later years.

I’m here to discuss the merits of what RS is doing as a long-term operator – we are long term custodians and are there to help and protect the owners present and future. We have never charged ground rents but do operate a Transfer Premium within the model, this is to ensure the support of our Courts and sustainability of the model. However we are conscious the model needs to keep evolving.

That is where Leasehold reform comes in – the retirement sector can’t just stick to the old typical general housing leasehold model. Which is often… Sell property, make money… place a management company in to run it, change this management company regularly to kick the responsibility for long term sustainability down the road – all responsibility subsequently lies with the residents and no one, including in some circumstances the tenants, really care until something goes wrong.

I stress that is not the RS model nor the practice of Independent Retirement Community operators working in conjunction with ARCO.

Nor can we adopt a Common Hold approach– the later living requirement is different to a block of flats with all associated costs and is a model whereby on site you also have a manager, cleaners, café, support, care, where loneliness can be addressed, and communities can thrive.
The challenge is to find the model or models – fit for purpose – fit for the future for both owners and providers.

RS supports Leasehold but a leasehold where owners have a strong voice. However, we agree it is in need of a better regulatory environment and protection for the consumer.

Deferred Management Fees, sinking funds and sustainable financial models are complicated transactions and it is a travesty that we don’t protect older people with any form of consumer, sector specific legislation – at all.
Consumer confidence is key – this can be driven by reputable operators putting leaseholders first – demonstrating that charges are delivering value for money.

RISK – immediate and in future years…

Cost of living – inflation in general

Leasehold or Commonhold – everyone still has the same concerns /problem – how do you sustain the rising costs of repairs and maintenance?

Net zero initiative targets 2035/2050 – Currently it is not clear if or how this will affect old housing stock. But, inevitably retrofitting will be costly. Within the retirement housing sector, it may be more difficult to get the buy in – effectively paying for the ‘long term’ future, today. This is different and additional to general lifecycle long term maintenance already being charged through Service Charges or DMF’s. It may even encourage freeholders of existing stock to make the decision to demolish and rebuild.
This will impact residents and stock availability.

In conclusion I leave you with our strong belief – “That our owners should be Living the best years of their lives in the later years of their lives.” To achieve this across the entire sector there is clearly still much work to be done and many conversations to be had. Together I am sure that the best solutions can be found for all Leasehold environments to meet the needs of both owners and providers.

Owners should not be worried about having to sell the home that they downsized to, believing that it would be their last home, just because they can’t sustain the service charge, and whilst there are options to prevent this – regulation is required.

Whatever suggestions are made about leasehold reform by various bodies, the Retirement Sector’s voice should be paramount when discussing leasehold reforms which impact later living. There is no one-size-fits-all solution.