McCarthy and Stone apartments. What's the worst that can happen?

[Purpleandping]

This living style would suit my DPs and remove the burden of supporting them in their overly large house from me.

From my POV, I don't really care if it's a poor financial decision. It's their money and should be spent on a comfortable life.

My sister, who is a good person, but lives a long way away so isn't involved in the day to day of it, is worried that "we" will have to continue paying charges after their death, if it doesn't sell.

If it's the estate that would pay, I also don't have a problem with that. If their whole estate is swallowed up in paying for this place, to give them a decent life now that's OK. Obviously it would be better if it wasn't but if that's the worse case, that's OK.

DSis is worried that once the estate is spent, the charges would fall to personally. Can that be true?

So, whilst it will ultimately be DP's decision, I'm comfortable if, worst case, all their money is spent, leaving no inheritance, but I wouldn't be comfortable to think I'm committed to paying out of my own money if things were very protracted.

ignore I misread the message..

If you've inherited the flat, you've inherited the costs too unfortunately. A friend of my parents used all their savings, so her daughter inherited the flat and was paying all the charges from her own meagre finances. It took forever to sell at a price much, much lower than her mother had paid for it.

It's nice to hear from someone trying to do whats right for DPs without having an eye to inheritance. I would love it if my parents could do this, and I wouldn't care about inheritance either @Purpleandping. I'd be happy to hand it back to the provider for next to nothing if it came to that. Ten years ago this kind of housing would have benefited them hugely. Sadly my DPs are too elderly now, for a move. And they would be too poor to buy anyway. In your position I might just speak to M and S... See what they say re a couple of scenarios. As you say, your parents are spending their own money ... It's not yours.

Is this Anchor/Hanover etc ?

My 88 year old Aunt moved into an M & S 1-bed four years ago - she's now 92. It has been the making of her. She has more friends than she's ever had, is proud to be independent but has 'help' around when needed. There are carers who come into the development, and help different residents and and when their needs vary.

The development consists of just 22 flats, in a superb central village location, and her service charge is £300 approx pcm. Certainly her current outgoings cost less than her previous home, where she had lived for over 50 years.

I feel that she is getting the absolute best out of her final years, and am happy that DB and I are agreed that this is the absolute priority. She has very little savings, so I know it's going to be a shit show when we come to sell (or she needs to move into a care home), but we'll cross that bridge when we come to it.

It’s because, on average, people buy them when they are elderly and in declining health, and then don’t survive to live in them long. Supply outstrips demand as a result.

The stress of selling them passes to the family. The monthly service charge accrues until it sells and is deducted from the final estate. It took me 3 years to sell one.

Besides how it impacts inheritance, the stress of it all is difficult. Doubly difficult if the owner survives buts needs funds for a care home.

Just wondering if renting a retirement flat could be covered by simultaneously renting out their current home? Then you still have the equity in that when parents get to the next stage. I've no idea if the figures would work. Just an idea.

Don't do it. They are a millstone around your neck. A relative of mine had one and we were lucky we sold it quickly and without too much stress but the management company First Port were shysters and made the process more difficult than it needed to be.

Could they live in a normal flat? There would still be service charges but they are much easier to sell than retirement flats or you could rent one. A lot of these retirement flats can't be rented out.

They eat up the inheritance if you can't sell but I think the issue is that once you own the flat if your parents die you are then responsible for service charges etc and then it could be your money. Also - you might want to sell to fund care and be unable to in time, or at all.

My mum bought an extra sheltered flat run by Retirement Security Ltd. Six were up for sale (out of 90 in the two blocks) and we put in low-ball offers on each. One vendor, a probate solicitor and a charity as beneficiary, bit and we got the flat very cheaply. My mum had seven good years there despite being disabled by Alzheimers, and it was an awful lot cheaper than a home.

When we came to sell we used the money we had saved before to price the flat cheaply and sold within a week.

You can't rent them out and people tend to like a shiny new one.

There are more of them than there is demand.

OP you need to go and speak to a solicitor who knows about these flats and isn't conflicted by acting for M&S or First Port. But my very firm advice would be to look at other options. Possibly other retirement flats but not anything built or run by M&S or First Port. But I'd look for a nice normal flat or a bungalow if you can find one your parents can afford.

It depends on how big the estate is whether it would come from your pocket. If the flat was the only asset and little savings then there wouldn’t be much spare for the fees. If there was many thousands in savings and stuff then there would be enough to pay the fees out of the estate

I live in one of these developments and yes it is worth less than I paid for it BUT the ease of not being responsible for the structure, the garden or any building maintenance is worth more to me. I can go away and not worry about my property or what state the garden will be in when I get back.
Yes the service charge is still payable if you aren't able to live there anymore, but you can negotiate to defer payment until the property is sold.
Read the lease carefully, ask for the last 3 years service charge accounts and ask if there are any major works needed that will not be covered by the contingency fund.
Good luck.

My aunt was in one of these and it was a nightmare for my cousin when my aunt had to go into care. The rules of the complex stated that the person buying had to be over 50, also I think that only one person could live in the flat. Social services counted the flat's value as part of my aunt's assets when working out the amount of care home fees, but my cousin couldn't sell the flat. My cousin wasn't able to massively reduce the cost of the flat either.

What this meant is that for some time, my cousin was having to pay her mum's care home fees OUT OF HER OWN MONEY, because she couldn't

• sell the flat and get the cash
• give the flat to the care home as payment
• have social services pay for her mum's care home

While my cousin could have faced the same problem if her mum had owned a general flat or small house, the rules around age cut down the buyers. Obviously also no-one was going to buy it to rent out, so that cut down buyers too. I can't remember whether the rule around not reducing the cost was a MS rule, or because selling too low would have counted as depreciation of assets for the care fees of both.

my in-laws live in an M&S apartment on the south coast, moved in when it was brand new 20 years ago just after they turned 60. They love it and have lots of friends - they enjoy the community aspect of it, but it's not for everyone. There's no doubt that the property is not worth as much as the house they moved from in London would be. Financially it's probably not been the best decision, but personally it has. They're both in pretty good health, which obviously helps. I understand that my wife and her brother will be left the property when their parents pass away - but neither are expecting a huge inheritance and have accepted there'll be little money coming their way.

Depends if the community aspect matters to people and how far down the line they are socially and health wise - late 60sand 70s the posh ones like Rangeford are a ‘lifestyle’ with restaurant/var/leisure club in many cases - not just an over 55 flat -but with high service charges too unless you rent - if you have pots of cash there are some fantastic options at £4K a month rents, including all bills. It’s a really individual thing - and depends what position you are coming from , income etc -

You only have to look on the bbc news site. £11,000 a year in service charges that the family have to pay, property reduced by £200k, new buyer needs to be over 70!
They may not be able to stay on the property, depending what happens in the future, what if it needs to sell to pay for advanced care? Wouldn’t touch one with a barge pole.

This is obviously a huge misselling scandal or at least a big consumer issue.

Clearly M&S don't want people to rent pre-owned flats as it reduces demand for new ones, I'm sure I've heard that renters might not have the same access to the facilities as owners, which would be another way renting is less attractive.

Where is the protection for people who may be vulnerable? Should conveyancing solicitors be strongly recommending people do not buy or even refusing to do the work due to the high service charges, restrictive occupancy rules and poor resale value meaning that money could be lost and the care home fees problem ?

Are people able to actually sell the flats if they really drop the price, eg if they sell for £50k but bought for £200k?
After all, compared with not selling, a lot of the 'lost' £150k is likely to go on service charges and care home fees while the property is unsold?

If someone bought at that price are there any issues for them, as the amount they could potentially lose would be a lot smaller?

It's such a shame because I can see it's a very attractive product - nice flat with independence but on site support with social facilities. Are there any places who offer this without taking advantage of people?

I can't remember whether the rule around not reducing the cost was a MS rule, or because selling too low would have counted as depreciation of assets for the care fees of both

Ah, that might have answered my 'why can't they just sell it for £50k' question.

Its obviously not depreciation of assets because if a property isn't selling its because the price is too high, due to oversupply vs demand or something unattractive about it, in this case high service charges. The market sets the price just like any other property.

So it must be an M&S rule. How do they get away with it? I know it's 'buyer beware' but with past misselling scandals or unfair consumer issues there has been redress, eg endowment mortgages, car finance, new build leasehold houses.

Or is it a case of conveyancing solicitors saying 'we recommend you do not buy this property' but people go ahead anyway?

You can’t just sell them for £50k because people still don’t want to buy them at that price. Because there’s an age limit of over 65s only the pool of people wanting to buy is very small, and when you’re over 65 you don’t want to buy one that needs a new bathroom and kitchen and redecorating because the whole point is to make your life easier which is why the shiney new ones are attractive. Sometimes there’s a clause that you can’t auction them or rent them out either. It’s going to come out as a huge scandal one day.

My daughter is a lawyer and strongly advises against buying retirement flats. They do not hold their prices are millstones round the necks of those trying to sell and can take years.
whilst waiting for it to sell all service charges have to be paid.
surely the better option would be to downsize to a bungalow or an ordinary flat. Perhaps there would be equity that could be invested to help provide carers if needed. Also they could rent a personal alarm system.

The family would have to pay any outstanding money owed.

There are so many horror stories I know, but our experience wasn’t like that.

Like you OP, we didn’t care at all if all of the inheritance was lost as long as DM enjoyed living there and she really loved it. DM died, we listed the flat way way below market value because we weren’t looking to make any sort of return, it sold within weeks because of the low price, we didn’t pay any service charges until it had completed. We did feel very lucky that somebody wanted to buy it so quickly - if they hadn’t, we’d discussed renting it out just to cover the service fees. But ultimately, it wasn’t a financial investment and none of us cared about making the money back that DM had spent. I will say though that when DM sold her house to buy the flat, she was left with around half the value in savings as she bought the M&S near us which is a much cheaper area than where she was previously living. This meant that she did have a bit of money to pay privately for a few months of residential care at the end.

They can work for some people but I looked at them for my mum and decided against. These are my reasons:

The warden doesn't do anything if there is a problem. The absolute default in all cases is call an ambulance. Even if you just need a hand getting up from the floor. So in practice there is zero care element.

If you need care you have to buy it in yourself.

Some wardens are genuinely lovely. Not all. And they change.

Service charge is high. M&S also take a percentage of the value of the apartment on every sale in my experience.

M&S also control who you can sell to. This means that if there are other empty units they can to some extent prioritise those over yours on a sale.

Re-sale values are low for the reasons above.

Standard of construction is poor. Very similar to a lot of modern apartments these places are going to look very tatty in time. Big depreciation for this reason.

They are not generally suitable for end of life care even if you are paying for support privately so not a permanent solution to aged accommodation.

If your budget can stand it you will in my opinion always be better off buying a suitable existing property (eg bungalow) and buying in the services you need.

This does not give you the "community" that M&S market but there are pros and cons as to how communal you want to be sometimes.

Buying the retirement flat is not like you’re buying a house, the bricks and mortar ie the interest in land the freehold.

in the case of M and S retirement flats, It is buying a long residential lease, a right to occupy provided you comply with the T&Cs in this leasehold contract.

If you do not comply for eg not pay the sc and ground rent then the landlord(M and S) can and will forfeit the lease so either the lease holders or the inheritors end up with nothing.

It is recommended to Google AI to get the legals and other facts on retirement flats and leasehold obligations- it advises using a solicitor who specialise in this type of work (take care some claim they do to get the work and fee).

If they need to move to a care home, the charges still need to be paid even if it doesn’t sell for 18 month or more.

No problem (in theory) if there’s plenty of cash for paying care home fees, too.

Also, from all I’ve ever heard, they rarely seem to sell for anything like what was paid for them - certainly if bought new, anyway.