MCCarthy Stone- what's your view?

[Flyhigher]

Elderly parents in law thinking of a McCarthy Stone place. What do you think?

Is it good or bad? Are they financially worth it?
Do you lose money?

I completely disagree

I don’t think they are scams as such - itsall very well documented to the letter from what I saw - that doesn’t make it a good deal I agree, but not a scam . however what has to be factored in is they are often very hard to sell if you need quick access to cash and lose a lot of value constantly - particularly if bought from new , and that just because they are for older people doesn’t mean all old people want to live in dingy grotty surroundings, so do need upkeep and refreshing if anyone has a hope of selling to someone at a semi reasonable price and same goes for area, why buy an expensive top dollar new one in an area where many have no money and nor would anyone want to relocate and retire there . The service charge thing would be the same though if they bought a standard non over 55s flat - as would maintaining and refreshing it - the only thing I feel is a slight scam and it needs to be made clear is very often you cannot let it out and any family need to be aware of if there is spare cash in the estate to cover off service charges and any council tax due

And I totally disagree with you. They're completely transparent about the model. IMO.

This exactly. Why should the government save us all from ever making an investment we may later come to regret? I had a stressful time offloading a property when DM died. With hindsight I wouldn’t touch one with a barge pole. But in no way can I say it was a scam.

The property my MIL lives in has no unoccupied flats and a waiting list of people wanting to live there. I'm taking that as a hopeful sign that it shouldn't be too difficult to sell it when the time comes. But even if it does take a while and we have to pay the service charge during that time, it's still worth every penny, because of the benefits to her of living there for the past 2.5 years (plus however long in the future). It's been a massive weight off DH's shoulders as well.

I'm very anti the MS model, but it's not a scam. Just (mostly) a very bad deal. If the inhabitant needs to move to a care home, the flat often has to be sold to pay the care home fees. If the family can't do that quickly, it becomes very difficult. The LA will offer a 12 week property disregard, but many MS flats can take months, if not years, to sell.

If my mother needed extra support/care but wanted to remain independent, I would suggest she looks at Extra Care housing. These are schemes operated by Housing Associations which have care on site. I can't believe the PP upthread who said she wouldn't live in a HA flat. One of my friends parents, who is extremely wealthy, lives in one. She sold her house for over £1m. They aren't means tested.

It depends on the area but where friends mum lives many of the extra carev flats are rented by retired academics. They have book clubs, wine tasting evenings, film nights etc.

All the HA flats here are 1 bed. My parents need 2 beds as they don't share a bedroom. So that rules HA out completely.

Ultimately, people need to choose what suits them for now.

All of these flats will sell if priced right. Don't overpay and it'll all work out, IMO. (And don't put all of your capital into buying one.)

As has been repeatedly posted, spending all your capital on a McCarthy stone retirement flat is foolish. But as part of a plan for later life, making sure you also have a chunk of cash for future care needs, they have a place and they have certainly enabled a better quality of live for many. Now, that might be at a price you don’t want to pay. And yes, almost certainly, if you’ve only got a £1m in capital at 70 then you probably don’t have suffice resources to comfortable use this type of accommodation as part of retirement planning. But for those that do, and can, it’s not a scam.

I don’t want to end up in a housing association property for a couple of reasons. First, having had a comfortable life in my own properties in areas I want to live, there is zero appeal to me in moving into social housing, however you dress it up. Secondly, as an affluent enough economically inactive person I’d rather that housing associations and councils focused their scarce resources on those who are in desperate need of housing, rather than providing accommodation for those that can afford their own.

I’m sure that some retired academics love it, but is suspect that’s a function of working for academia being very institutionalised and so the move from one institution to another feels comfortable ;)

But £1m in capital at 70 is a vast amount of money. I can imagine it’s the case if you’re in an expensive part of the country and own a house outright. But what puts my relatives off a MS style property is that the cost is not that much less than their house is worth (a part of the country where houses are £150-300k) and although they have some savings they don’t have pensions high enough to cover the service charges easily. And the service charges are frightening if you’ve always had a freehold property and never had to fork out those sort of sums every month. Realistically, they could manage it by whittling down the savings gradually paying the rest of the service charge but that’s a frightening prospect.

@Tryingtokeepgoing I don't think you understand the Extra Care model. The new schemes near me are easily as nice as the MS ones but with many more benefits.

They don't detract from housing stock because the criteria for entry isn't housing needs but care needs.

This is the sort of scheme near me

https://www.anchor.org.uk/our-properties

@NoWordForFluffy I'm sorry the Extra Care schemes near your parents are only one bedroom. I've never come across that model as where I am, all couples are eligible for 2 bed flats unless they want a one bed.

We don't have any Extra Care ones near us. Only bog standard Anchor - 1 bed - properties.

ETA: the nearest Extra Care are studios and 1 bed. 1 development out of the nearest 6 (didn't check any others) had some 2 beds.

@Tryingtokeepgoing, where the hell are you getting £1m capital needed at 70 from?! My parents have nowhere near that and should still be fine. Could I have your maths please, to see why you think that much is needed?

They're missing a trick if they only offer one bed properties.

I hope your parents manage to find suitable housing

They have, thank you. They're buying a supported living flat, as per the thread subject. (Not with £1m capital though!)

Well I’m basing it on someone wanting an income of at least £40k (indexed) a year which means having at least £750k of capital in a pension at 70. You’ll need £500k to buy a new over 60s McCarthy Stone 2 bed place in the south, and I’d want to have 5 years of decent, private care home funding available without having to rely on the sale of property, which is another £500k. So that gets you nearer £2m of assets £1.25m which is reasonably liquid.

Different if you have a final salary pension scheme - they will more income rich / asset poor pensioners and might only have the care home funds available. But I’d still want them not to be dependant on property sale, and, if you are fortunate enough to still have a spouse who’s alive you’d probably want more available for care than 5 years worth.

Nothing wrong with not having that much available, but you are then at risk if you need to sell a property that has limited demand, and in that situation you’d have to be very comfortable with the alternative care solutions. Maybe plan for 2 years care at £75k a year. It’s a calculated risk at that point, and I wouldn’t want that to be a concern in later life.

Come on, how many people actually have that much capital at 70? Very few, I'd suggest.

You're also pretty daft with money if you're spending £500k on a retirement place. I've already said that my parents are buying for less than £100k. Buying second hand is the key, wherever you buy.

I don't think your figures are realistic for the majority of pensioners really.

Oh I fully understand that; but housing associations and local authorities only have limited funds. So, building those types of properties for people who could afford their own homes and care provision does mean less money available to build houses for those in genuine need. And so does mean less housing stock. That’s the point I was trying to make. I’m not saying rent shouldn’t bulr hem at all - clearly some people do need them. But I wouldn’t see it as part of any later life planning for my parents (in their 70s) or me, because we can afford better.

As a Gen X’er I know that buying property was easier for me than it is for the young today, and I would rather the limited funding available was focussed on provision for those less fortunate than me.

And as a side note, the types of development you are talking about are for those with more advanced care needs than McCarthy Stone is targeting. So I see them as the next stage along, but repeat my concern about where I think funds should be spent.

I’m sorry - I did t mean to offend. But, where abouts in the south can you buy a 2 bed property of any type, never mind in a nice area with good facilities, on site services, cafe and staff for £100k?

The whole point I have been making is that these developments aren’t aimed at the average retired person. They are targeted at those who have a decent income and plenty of capital. And I’ve shown what I think that is. And there are plenty of retired people who do have the equivalent of many years care home fees in liquid investments. Thats the MS target customer.

So if you are in that position I am not sure what is daft about spending 1/3rd of your available capital on somewhere to live?

Edited to add that of course you can spend less on one, and have less available capital. But, pound to a penny, it’ll be the relatives of those buyers that’ll be complaining that they are a scam, as they watch “their” inheritance disappearing…!

@Tryingtokeepgoing in all fairness most of the very upmarket ones that are marketed as villages here in the south with pools, restaurants, hairdressers, in site bars etc are around£500k new, £385k second hand and the apartments are very lovely too - they are marketed at the very well heeled -they are not your typical block at all - we do have those more ordinary ones too and as you say it’s perfectly possible to buy in Reading or Bridgwater etc at that£100k kind of price, but that isn’t what that mumsnetter is looking at . She’s looking at a lifestyle, not just a flat .

You haven't offended, I just think your maths doesn't work for the majority of 70+ year olds!

I don't know about the south. Thankfully we don't live in the south and have access to far cheaper properties. I imagine some people will shift their late parents' retirement places for way less than £500k though. Buying new is a stupid idea for this model, IMO.

But McCarthy Stone aren’t targeting the majority of pensioners. They have plenty of developments where a 2 bed flat will cost between £400k and £500k in the south. And if you’re downsizing to one from a 3 or 4 bed detached property in a nice location in a similar area you will be trading down from a £1m plus property in many cases. That’s who can afford them, IMO. They then have funds for care, a nice place to live and a decent income. It’s the sort of later life I’d be happy with. Not a housing association flat, with no cash for a care home if I need one. Of course, cheaper flats are available. But care home costs are pretty similar, for a given quality, around the country.

My generation has done well out of life - why would I want to disadvantage the next just to save a few ££

Well, they don't cost that up here (we don't have M+S in this town, but I just checked local-ish sites) and very very very few people have a house worth £1m round these parts!

You're clearly very southern-centric (and not all of Gen X have done very well for themselves either, same as not all boomers have either).

So your maths probably / possibly works if you're in the south. Not so much in the north!

When people say they don't want to leave a problem for their DC to sort out I don't necessarily think it is about leaving less of an inheritance if they have to sell at a loss, it is more about the stress and worry involved and it going on for years so that people can't get proper closure and move on in life when they are grieving. I don't think it would be my kind of thing anyway and that's OK we are all different. I do think about this subject quite a lot as I am now 70 and DH nearly 80 with some health problems. We are still living in our family home where we brought up our DC who are both now adults. DH does not want to move or downsize but realistically I can see that at some point I may well be on my own and then I definitely would as I would not manage the current house or garden by myself. I think I probably would buy a flat but not one in a retirement village, just a normal development nearer to where DD lives where property is cheaper than around here.

@NoWordForFluffy I don’t think you are wrong - it’s going to be a model that won’t work as well in areas where property values are much lower when people are trading downwards in terms of size. You might get similar ones in Cheshire or posher bits of Warwickshire or Harrogate etc - but you are right they tend to be southern centric - I also think unfortunately older people in midlands and ‘up north’ ( and I’m originally an East Midlands girl) are disadvantaged when it comes to care homes too due to their home values- because whilst care homes are ‘a bit’ cheaper they are still hugely expensive , but without the £600k that someone with a fairly average home in a nice bit of Surrey or Bucks might have as equity . That’s why I feel strongly the whole care model has to change particularly with regard to care homes and paying for carers. I do feel strongly that if we don’t want people to feel resentful that all their assets will go on potential care we need to look at paying into a state insurance specifically for social care that is ringfenced - maybe from 40 onwards- covering off carers at home and care homes and upping the standards enormously across the board

Something definitely needs to change, I agree. It doesn't seem to be something politicians are thinking about (since Teresa May looked at it).

I'm originally from the East Mids too, but drifted north!