“Retirement Housing Review – McCarthy & Stone”

I started this thread about retirement housing when I wrote a post a few weeks ago on a very upmarket scheme in London.    Following that I wrote about the key issues that are driving the future of this market (you can see my earlier posts by clicking on “Retirement Housing” in the Topics list).

This is my second in-depth look at one of the major providers in the retirement housing sector:-

McCarthy & Stone

This organisation has been the private sector market leader in retirement housing for many years.    They were the first house-builder to move into the sheltered housing sector over 40 years ago.   What is somewhat surprising is that their market offer has hardly changed in all that time and is still essentially selling the same product.   They now have sub-divided their products into three basic divisions.  “Retirement Living” which seems to be their original offer and is still the majority of their schemes.   Secondly “Assisted Living” which is an enhanced offer which provides some degree of support.  Finally, what seems to be a re-branded model obscurely referred to as “Ortus Homes”, which although it’s claimed to be a pioneering concept, seems only to be a stripped down version of their original sheltered housing model.

Their website is very substantial which you would expect from such a large organisation.   They provide a lot of the information you might need to consider purchasing one of their properties, but you do have to be fairly adept at searching the website to find it.   Here are some of the key facts drawn from their website:-

  • Their schemes are provided over a wide area of the UK although annoyingly you can’t find a map showing you where they are all located.   The retirement living schemes and the new Ortus projects are typically between 20 and 40 units.  The assisted living units, which are similar to Category II sheltered housing tend to be around 50-60 units.
  • Communal facilities in the retirement living schemes are fairly basic but generally have a communal lounge and a guest room.   The assisted living projects would also include a restaurant and lounge areas.  The Ortus Homes projects seem to have taken out all these communal facilities and only offer a basic independent living option which to me appears to be a backward step.
  • Individual properties are generally a mixture of one and two-bedroom apartments.   Strangely although they provide individual plans and room sizes, there’s no reference to the overall size of the flats.   I suspect that the earlier retirement living accommodation and possibly also the assisted living flats are quite small.  No doubt the new Ortus Homes which are described as luxury “right sized accommodation” are significantly larger.
  • Purchase prices vary with each scheme location and when they were built.   Here are some of the one and two-bedroom apartments currently available:-
    • Wolverhampton – one bed          £160k to £200k        Retirement Living
    •                                – two bed          £240k to £255k        Retirement Living
    • Ashby                    – one bed          £170k to £200k        Retirement Living
    •                                 – two bed         £245k to £260k        Retirement Living
    • Swindon                – one bed         £205k                          Retirement Living
    •                                 – two bed         £301k                          Retirement Living
    • Leicester               – one bed         £200k to £211k          Retirement Living
    •                                 – two bed        £281k to £286k          Retirement Living
    •                 Leicester                – one bed        £143k to £163k           Assisted Living
    •                                                  – two bed        £238k to £288k         Assisted Living
    •                 Nottingham           – one bed        £227k to £300k         Assisted Living
    •                                                  – two bed        £278k to £481k          Assisted Living
    •                 Harrogate              – one bed         £264k to £274k         Ortus Luxury Homes
    •                 Swanage                 – one bed        £350k to £400k         Ortus Luxury Homes
    •                                                  – two bed        £421k to £526k          Ortus Luxury Homes
    •                 Buckinghamshire – two bed       £575k to £595k          Ortus Luxury Homes
    •                 Essex                      – two bed        £620k                          Ortus Luxury Homes
    •                 Hampshire            – two bed        £380k to £650k        Ortus Luxury Homes
    •                 Poole                      – two bed        £595k to £769k         Ortus Luxury Homes
    •                                                 – three bed     £1,425k                        Ortus Luxury Homes

In addition you pay an annual ground rent of circa £500.   They also have a 1% of capital charge on resale plus a small sales admin fee of £324.

  • Service charges vary from scheme to scheme but seem to average around £200 per month.   One hour of domestic support is provided within the service charge for assisted living.   You may also pay an extra charge for a parking space.
  • Domiciliary Care and Support.  A firm called YourLife provides care and support in the assisted living schemes.   It is provided on an individual basis but there’s no indication on the website as to how much these charges are likely to be.

Overall McCarthy and Stone still seem to be trading on their historical market leader position.   Their new brand of Ortus Homes seems to have abandoned any pretension of providing of any degree of communal living so I’m rather confused as to how this accommodation can in any way be described as pioneering in terms of retirement housing.  What is obvious is the intention to move upmarket with better located sites in terms of “sea views” and presumably, but not clearly, larger size accommodation.

These guys have long become followers not the market leaders they once were.

I maybe doing them a disservice so I will endeavour to go and see some of their newer schemes in the next few months and I will report back after that.

 

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18 Responses to “Retirement Housing Review – McCarthy & Stone”

  1. no comments here. This was not for me, for a variety of reasons-It is down to ones personal choice, and what the Elderly/retirement/down=sizing industry has to offer is as true today as it was yesterday.
    I cannot smile, maybe wryly with scepticism.

  2. PDHulme says:

    After McCarthy & Stone were featured on Channel 4 Dispatches programme about their selling tactics, the producer of this programme contacted me for further comment. I told him I see a bigger story than the initial sales of the units which is the resale values of these properties.

    In a recent Retirement Development I was involved with, I researched local competition and McCarthy & Stone had a scheme which was around 4 years old in close proximity. Looking at publicly available Land Registry data for the last 12 resales in that development resulted in an AVERAGE 50% loss on initial purchase price.

    I know that very recently McCarthy & Stone has begun their own Resales agency and are offering more support in this area which I see as a critical part of their marketing message. No one wants to make an investment which is bound to lose.

    I have advised a family friend on their purchase of a brand new McCarthy & Stone apartment in Leicestershire and made them very aware that their property may not be worth what they paid for it.

    • john graham says:

      Thanks for the additional information. I had a similar experience when I resold a property in a McCarthy and Stone scheme in Gloucester. It took two years and lost 25% of its original value.
      I think this is a problem with lots of retirement properties, especially when other properties in the project are up for sale at the same time. What’s more the resales agents take advantage of this to drive prices down further.

  3. Amara says:

    Thanks for these helpful reviews. Alot of elderly people prefere to live at home and as a result theamount of retirement homes available are increasing. Very helpful for elderly people looking for retirement homes and will help alot of people make the right choices. It will be good to see if your views change after a few months.

  4. keithmansfield says:

    Thanks so much for posting this report. One thing I’ve found very different is that the Nottingham service charges (for a 2 bed) are about £9,000 a year, so four times the £200pcm you quote. If I recall the 1 beds are about £7,500). This seems very expensive considering you have most of your bills still to pay on top.

  5. Jeremy Beales says:

    In Worthing the Mcarthy Stone assisted living flats were obviously sold at a grossly inflated price compared to similar new build flats in the area. This doesn’t make sense as the service charge (itself high) covers the costs of the additional services – the flat shouldn’t cost any more than a normal flat. Currently 25% of the flats are up for sale. My mother’s is priced currently at a 20% loss but other flats are looking to lose more than this.
    I think the key point is that no-one should buy these flats unless the price is similar to other flats in the area. And don’t expect to participate in any general property price rise as this is a specialized market. I think these schemes are relying on the better off (those who own houses) and their children wanting to keep an equity stake when really they should be worrying about their long term care needs. Mixing property ownership and care together is a mistake.

    • john graham says:

      Thank you for that useful feedback, I had a similar experience when I sold my uncles McCarthy and Stone flat in Gloucester a few years ago. If there are lots of other retirement houses in the same area their flats don’t hold their value in the market.
      They are generally more expensive to construct because of the additional facilities usually included in the scheme. McCarthy and Stone should offer a buy back scheme otherwise they will find the service charges do not cover the cost of running the whole project. I am aware that they pass these costs to individual owners, but it creates great distress if resales are difficult and will eventually damage the viability of their financial model.

  6. Mel Smith says:

    Made a visit to new development at Walmsley Place, Bishop’s Waltham some time ago. Shortly afterwards received a call from them when I informed them that I thought the detached homes were poorly constructed and hugely overpriced for what they were. I asked to be taken off their register but continued to receive correspondence from them. This week I telephoned to request them cease sending material to me, only to be informed that I could not be traced on their mailing list and that a third party organisation called Experian would have been responsible for this. Clearly I am not at all happy that my details have been passed on without my authority, and distinctly unhappy that nobody has phoned back despite my request for escalation, having been advised by staff that they have referred. Perhaps Hayley Bailey, Steve Scoley?, David Bridges or Clive Fenton could call me depending on how serious they are about their public, and potential buyers, image.

  7. Steve says:

    I bought a flat in Glasgow for a family member. It’s been a nightmare like many of those above and dealing with the company has been horrific. We were missold the idea of assisted living and the concept of private luxury. The reality bears only a passing resemblance to the description from the sales agent There were lots of construction issues that blighted the development and the operation of the restaurant and associated facilities have been really poor. The management company has little interest in anything other than making profit and there was a culture of harassment and bullying from management. It’s been a real nightmare for the family and if you want privacy and peace in your latter years don’t buy a M&C appartmrnt. Complaining to management is slow , time consuming and seems to be legally focused. There is little compassion for the residents or interest in their wellbeing. In terms of value it’s absolutely disastrous – we have probably lost 25-30% after four years against a local market that has been rather buoyant. This was partly driven by overpaying at the outset and undoubtedly by the dreadful reputation that the facility has with local people. Lots of complaints and lawyers intervening seems to be the reality of McCarthy Stone assisted living.

  8. A Hobbs says:

    Linlithgow development has NO parking for carers, doctors, nurses, prescription delivery, family or anyone else except 10 spaces for residents. As a builder of over 60s accommodation surely this type of support should have been catered for. POOR PLANNING.

    • john graham says:

      Thank you for your comment. I don’t know this particular scheme, so I looked at the website and it seems to show a lot more than 10 car parking spaces. With 35 apartments I would expect around 35 spaces for cars. Although having built a lot of retirement housing I know that there is always difficulty providing enough visitors parking.

  9. Susan says:

    I bought a McCarthy & Stone apartment (built 2002/3 on the A38 in Birmingham and now managed by First Port) – nearly two years ago with the assurance that there was parking available – it was a lie. There are 77 apartments and 23 parking spaces, the problem exacerbated by flats still being sold to car owners and we now park 3 and 4 abreast. There is no parking for visitors, carers, maintenance companies etc. This is a ludicrous situation and potentially isolates residents from family and friends, restricts residents’ mobility and is problematic for carers and emergency vehicles. This is a negative aspect of moving to a retirement property and should be included in the glossy and hyped selling materials.

  10. john graham says:

    Thank you for your comment Susan. Car parking has been restricted by planning guidelines for many years, all in a move to promote public transport and reduce carbon emissions. This is a nonsense when you properly consider the mobility needs of older people.

  11. Maeve says:

    Have obtained copy of draft lease of new-build apartment which I’ve reserved. Assume a template is employed, but terms seem heavily weighted in favour of Landlord. Now having second thoughts about proceeding with the purchase.

  12. RachelWoolington says:

    My dad’s set his heart on a 2017 Mccarthy and Stone retirement flat and we currently have one on hold. My dad’s recent hospitalisation has stalled the sale, and now his memory is rapidly declining to the point of sometimes bizarre behaviour. If he was to become more poorly or suffer dementia, can he be evicted? how accommodating will the company be of his increasing medical needs? When I gently enquired, the sales rep flippantly replied that they had a mobility scooter facility in anticipation for their residents becoming elderly.

    • S says:

      I would not go near them. Once my mother in law deteriorated the manager of the complex did all she could to chase her out- it was heartbreaking and very stressful. The sales people way over committ

    • john graham says:

      I can’t speak for McArthy & Stone but any form of sheltered housing may not be a good long term option if your farther has dementia. His confusion may be due to a number of causes, so it is important to get a clear diagnosis before committing to housing that may not be able to offer appropriate care and support..
      My best wishes to you and you father.

  13. RachelWoolington says:

    Thank you for your comments! As I suspected! – I’ve already got cold feet. The trouble is that Mccarthy and Stone are now offering him an even more desirable flat at a reduced price on proviso he completes within 4wks. They want an answer before the end of the week. Why the haste? I’m desperate to walk away but he’s even keener.

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