Be cautious about buying McCarthy and Stone!

mervynpeake1952

My sister, my cousin and I inherited a McCarthyStone flat in 2021, purchased by my aunt in 2017. New price; 180,000. It has been on the market for 4 years. Now at 75,000. Service costs 8,000 pa. In the complex of +/- 50 flats, 20 have never been sold and 11 are up for re-sale at present. In four+ years about 5 viewings, no offers. A maximum of 4 re-sales last year at 20-40,000. Adverse publicity re. the service charges which continue at 100% post mortem without a time limit, means there no buyers. The government has to intervene. Michael Voges, the head of the Association of Retirement Community Operators has made it clear legislation is needed to restore trust in the sector. A time limit of 2 years would completely free up the market.,

We are now approaching the point where cash left in the estate is less than service charges owed (and council tax, utilities and solicitor's fees have a higher priority) and , unless the situation changes , we will soon have to give back the property.

Murphybear

edgex said:

Albermarle said:

HouseMartin567 said:

Out of curiosity, is this only a problem if you buy new?

I think if you buy a second hand one, they can still be difficult to resell, but of course you will have paid a lot less for it in the first place.
Even if you make a small loss, as another poster said they can be a good place to live for older people.
Problem is if you buy new, the loss can be eye watering as the OP has found out. 

Even if selling a second-hand one, it's now widely known that the service charges are extortionate & that there's a very limited market your trying to sell to.
So a lot less potential buyers.

With such large service charges, unless you got one for a lot less than a comparable normal property, there's always going to be a big loss.

There are a lot these companies who rent them rather than sell and the service charges are included in the rent.  M & S also rent them but their rental charges are very high, generally the highest I have seen.  Our service charge is about £45 a week which is £195 a month.  It is cheaper this year than it was last year  . £800 seems ridiculously high. 

We live in a charitable over 60s Housing Association which 32 1 bedroom flats and 1 3 bedroom house.  We live in the house and we get charged the same service charges as the 1 bedroom flats do.  

k12479

mervynpeake1952 said:

...the service charges which continue at 100% post mortem without a time limit, means there no buyers...A time limit of 2 years would completely free up the market...

Which would likely result in higher service charges and/or the risk of a shortfall in funds occurring, with the associated subsequent issues.

SarahB16

mervynpeake1952 said:

Adverse publicity re. the service charges which continue at 100% post mortem without a time limit, means there no buyers.

No, the reason there are no buyers is because people enquire what the service charges are and what do they cover and they view the service charges as being too high/not offering value for money so therefore decide not to live there.

It has absolutely nothing to do with adverse publicity.  If anything I think it's a good thing there is publicity of the service charges so people know what they are.  It is also right there is no time limit because the costs still need to be paid otherwise the other residents would need to pay more. 

If the service charges were viewed as being reasonable there would likely be demand for these properties but the service charges are generally viewed as being too high and this deters people from wishing to live there and that is the issue.

Caveat: I don't wish to tar all of these schemes with the same brush as I know there are some places which are popular.    

bugfriendlygardener

Flugelhorn said:

ReadySteadyPop said:

Flugelhorn said:

agree main problem is that there is a very limited market - can be ideal property for the right person at the right time but there tend to be lots of properties and no many buyers . was looking at some built in 2005 and they still are not reselling for the original selling price 

Isn`t this something government should be looking into? 

why? it is known that the properties are hard to sell and it is a limited market, suspect much of the problem is that one person usually buys the place and another (who probably legally can't live there)  has to sell it.

Why ? Because many buyers didn't understand the implications of resale for their inheritors. My wife's parents bought in 2008 when the market was relatively fresh. When her last parent died in 2019, initial attempts at resale were unsuccessful. We have been able to rent but the income is relatively neglible compared to what my wife's inheritance could have been. We are only in our early 60's but are starting to worry if we will ever be able to shift it. There is also the issue of charges and 2nd home council tax charges when it does go on the market.

Olinda99

can I just check my understanding - is the problem selling due to sky high service charges or are there other reasons?

Flugelhorn

Olinda99 said:

can I just check my understanding - is the problem selling due to sky high service charges or are there other reasons?

there are the service charges - however what is supplied may well help manage a lot of the problems that the individual had in their old home. I had a relative in one and yes it was expensive but there were lots of positive things and they were checked on / had social events / a handy oddjob man etc etc

the other problem is the limited market - when you sell a normal house / flat there is a much larger number of people who may be interested whereas the market for these properties is quite small

Albermarle

Also in our area at least, many of the new property developments are aimed at the older market . So plentiful supply of new properties inevitably depresses the second hand market.

silvercar

M & S are aiming at the top end of the market. Generally people who are downsizing from high end homes and want top notch in their retirement home. Therefore they are attracted to new modern properties that attract a premium. The family then balk at the loss on resale. Buying second hand is probably a safer bet, but no one of age wants the hassle of modernising their retirement home.

Flugelhorn

silvercar said:

. Buying second hand is probably a safer bet, but no one of age wants the hassle of modernising their retirement home.

I think that is the case, the resales are often a very good price but can need quite a bit of work to get them back to the expected standard , not the sort of thing you want done while living in it and unless it can be bought and the work done before the new resident moves in it cane be an off-put