January 18, 2022

Any tips when renting a retirement flat (as we don’t want to buy a third!)

From Stella:

My 90-year-old mother is desperate to move from her retirement leasehold flat to one nearer me. This would be her third Peverel flat: selling the first was a nightmare and selling the current (second) one looks set to go the same way, so I’m hoping to persuade her to rent the third!

I would be very grateful for any tips on things to look out for in the tenancy terms, or any potential pitfalls to renting.

Can you please post this for the attention of readers of your Campaign against retirement leasehold exploitation site?

Comments

  1. My advice is: do not buy another one……

  2. Trevor Bradley says

    After the experiences you have had, and all the negative info about buying these flats ther is, I can’t believe your mother would even dream about buying another.
    With no disrespect, have you no control over her. She must have more money than she will ever need. I can think of better things to do with spare money than give it to the likes of most of these Landlords/Managing Agents.
    If you can “get out” – “stay out”

  3. Michael Epstein says

    I take the opposite view. Buying a retirement Home, particularly managed by Peverel can be a very good idea.
    For example, suppose it is the case that a parent hates their children.
    What better way to get their after death revenge than leaving the children with a flat they can’t sell, that loses shed loads of money and catches them with huge service charges that could bankrupt them?

  4. Could you find an ordinary non retirement flat nearby so you could offer your mother support as necessary?
    As to whether renting or buying is better – a lot will depend on your mother’s health and age. If you tried one 6 month tenancy you could both see whether it worked. I would have thought one elderly lady would be seen as a pretty ideal tenant. Karen’s comment should be set in stone ……..DO NOT BUY ANOTHER RETIREMENT FLAT

  5. Michael Epstein says

    The concept of retirement living is very good.
    It is unfortunate that due to lack of proper regulation, residents are very vulnerable to exploitation on every level. It starts with the purchase of an apartment, continues with service charges and ends when selling.
    Buying new build a person could buy a retirement flat for £225,000. The equivalent non retirement flat could be bought for £150,000. Immediately you would have paid a £75,000 premium for an “intangible asset” which has no value when selling. You may also be tempted into a part exchange. Never agree to this. You will lose thousands of pounds.
    Of course you will be liable for service charges. This is understood. Be careful to avoid any retirement development freeholder that appoints themselves as manager. This is normally through a connected company so it doesn’t immediately appear to the same company.
    For example, Mcarthy and Stone use Millstream (which is owned by Mcarthy and Stone)
    As was learnt from the Peverel business model, the temptation to “enhance” charges to increase profits can be overwhelming. So residents can be faced with paying large insurance commissions and not getting the best value for work done. As service charges increase so the value of apartments fall.
    It has been estimated for example that non Peverel managed developments are selling for up to 20% more than Peverel managed ones. Then, when it is time to sell do you have to pay an exit fee, which just adds to the financial misery?
    If you do wish to purchase, i would buy pre-owned. That way you will really know how a development is managed? I would take a close look at the builders and management company. Have they been the subject of controversy in the media? Have they got a history of financial problems?
    Look at the difference in pre-owned and new prices . That will give an indication of how much a new build will cost you.
    Though i did say “if you do wish to purchase, i would buy pre-owned” the reality is that until residents have proper protection, nobody should purchase a retirement apartment. Rent instead.

  6. Trevor Bradley says

    To Michael E. An absolute perfect statement of information and guidance. It should be published on the front page of every newspaper
    If I could wave a magic wand I would have a million printed and be handing them out to anyone who is visiting any Mc & Stone new sights – the first one being just up the road from me in Kenilworth Warwickshire.
    New 2 beds start at Three hundred thousand pounds !! with a S/Charge of Nine thousand six hundred and sixt pounds per annum!! Mind you you do get 1 hour a week domestic cleaning included in that.
    I can.t bear to think the financial losses the families will suffer on these in years to come.
    The government MUST intervene and stop what is and has been ongoing for far too long
    (For those reading this that do not know me I am one of 18 freeholders that equally own our own complex and I am the director of our management company)