Retirement property won't sell

[Queenofscones]

I have a friend whose father bought a 1-bed flat in a nice retirement village in a rural area in 2004. There's a restaurant on site and quite a lively social scene. The father paid £95k for it in 2004 and was happy there. He had to go into nursing care two years ago and died not long afterwards. My friend and her family have been trying to sell the property ever since. It was originally marketed at about the same price her father had paid for it but didn't sell. The family paid to have the kitchen and bathroom updated and decorated the place and replaced the living room carpet. Still no sale. They've take if off the market for a while and relisted at a lower price on several occasions and it's now down to £45k and there has been no interest. In the last couple of years the service charge has been £4.5-5k pa and the beneficiaries have had to pay that. Now the council are trying to hit them with council tax too.

The lease doesn't allow them to let it. The management company just shrugs. It's a nice little flat and when it was bought looked out over the gardens and onto open fields, but since it was purchased the owners of the place have built a new complex in front and it's lost the view and is now badly overlooked.

Has anyone else experienced anything like this? What did you do?

Did he buy new? You do know that there are a huge crash in 2008, so any retirement place bought in early 2000's, yours 2004, will now be worth possibly 1/2 what it was, so the £95k v £45k sounds about right. Many sit on the market for over a year before selling.

These sort of properties are notoriously hard to sell, how much are the monthly charges?

There are articles in the Guardian about this if you wanted to have a look. Its a tough one- I think the case I read about they sold to a company that buys properties to sell on- at a vastly reduced price.

Any property will sell if you reduce the price enough. If they don't sell relatively soon they will be losing a good chunk of the value every year. See what similar properties are actually being sold for ( not on the marketfor), reduce by 10 % for a poor view? and get rid. It's disappointing from an inheritance turns out to less than you hoped but it's still money.

All properties sell when the price is realistic for the economy, conditions and view.

Sorry op, you need to forget what it cost in 2004 as the situation is completely different now.

You need to advertise it at LOWER than comparable properties in order to spark interest.

Then request sealed bids if you are lucky and there is a bidding war.

Cut your losses because the longer you keep it the more charges you'll have to pay in charges. Council taxes are going up a tremendous amount so the sooner it is offloaded the better.

It's strange, I don't understand why these places don't sell in the UK. I would want one when I retire in a few years but probably won't buy as they're so unpopular. Why is that? It will sell eventually at the right price surely so reduce it but then readvertise with new photos etc so hopefully buyers will give it another look.

They cost a lot in ground charges, they kick you out as soon as you are no longer independent or they charge extortionate nursing fees on top of you stay!

Horrendous, especially as they are designed to appeal to the elderly but the owners of these financial scams/schemes are no better than circling sharks.

Any property where you don't own the freehold is potentially on dodgy ground as the ground charges can go up and up and up which is why these sharks don't discuss this much and are more interested in the glossy brochure dream and hard sell.

These are not charities and they do not have the best interests of the elderly people in mind. It's a mine field and elderly people who have financial assets are like sitting ducks for these sharks.

I would agree with the above except some are charities and more reasonable. They also tend to be ones with fewer amenities and lower service charges.

How much has it cost them so far? If don't sell for another few years, hie much more will it cost? I'd consider selling it for a really low price and consider not paying any more fees and council tax as the win.

I had this happen with my great aunt and decided to surrender the flat to the freeholder (management company) right away. You get nothing for the flat, but as you’re not the owner you don’t pay the monthly service charges and tax etc. or costs to re-furbish. As it is your friend has lost £10k plus the costs of the renovations. It’s still an option to stop haemorrhaging money. Retirement flats are really lifetime leases imho….there’s usually no way to actually get any inheritance gain from them.

McCarthy and Stone rent or buy? - www.mumsnet.com/talk/elderly_parents/4645357-mccarthy-and-stone-rent-or-buy

there was a thread on this last year which makes interesting reading

I had a whole thread about this my MILs mcarthy and stone flat took three years to sell after she died ,and her purchase price had been £149k back in 2010 and it eventually sold for £108k this is in London and in those three years service charges etc still had to be paid, we were lucky that managed to get it rented out a couple of times for six month tenancies but it didnt make any money just helped towards some offset of costs

Lots of lenders won’t lend on retirement properties so that reduces your pool of buyers, as well as the age restriction reducing your pool too. Can you market it anywhere else? Leaflet drop somewhere? If you’re using an estate agent I’d be pushing them to work for their fee.

I work in probate and we see so much of this. At least three families have walked away with nothing in the last couple of years - two had equity release loans which should be illegal on properties with such a narrow sell-on market. (I personally think the developers should have to buy back). And as for those developers who take a cut of the sell-on price. Scum.

Sorry OP.

Sorry not to respond: out for the evening. It's not McCarthy and Stone, it's an independent set-up and the flats are a bit larger. The complex offers extra services as people age and there's a highly-regarded on-site care home if needed, but it also has a good reputation for offering residents a social life and a community if they want one. It also offers convalescent facilities when people come out of hospital. Neighbours of mine sold their house and moved into a 2-bedder in this place only a couple of years ago. I've visited them there and they've really thrived. They paid £120k.

I just find it astonishing that anyone these days wouldn't think that £45k is a bargain for a tidy, freshly-done flat. An ordinary one-bed flat in the area would be at least £150k, so even if you factor in the service charge it seems to be a bargain. If I was a few years older I'd be tempted to sell my house, move in there, put some money in a savings account to pay the maintenance charge and then blow the rest. At £45k I wouldn't mind if my family had to give it back to the leaseholder.

It's tricky. Some of the older developments where supply outstrips deman down here on the south coast, you can't give them away.

Usually it's the charges.

Sorry, this won’t be any help to the OP.

But it’s a good reminder/flag for others to look out for when they/their parents are looking into housing options. There was a thread recently re how hard housing ladder is for younger people now (which I completely get). But there were a few posters saying along the lines of “there are plenty of over-50’s retirement villages, why can’t older people move into them and stop hogging their houses”.

Buggered if I’m contemplating that on the cusp of 50, I’m still young! And scenarios like this highlight why people need to be careful.

There are so many rules and regulations...as OP stated, you can't rent/let. People don't like property with no freehold. The ground rent and service charges can be ridiculously high.

I have been trying to sell a two bedroom retirement flat for 3.5 years. The price is very low, we've tried different agents but very little interest. It's costing me a fortune, especially as I now have to pay an empty property rate on the council tax.

It is the charges and also what you will find in the lease is lack of control over increases, despite there being a track record of consistency. It is the same with non retirement properties with high charges. With all recent lease scandals, purchasers are extremely wary.

You might have to list it at say £20k. D be glad his estate is rid of the ongoing charges

Yes, she gets that. Someone picking it up up at £20k will have an absolute bargain. Beautiful gardens with seating areas to wander around, nicely-maintained building for no hassle, lifts, windows cleaned each month, bar and restaurant on the premises, washing machines and dryers supplied, minibus that takes people into the local town 10 minutes away twice a day, no buildings insurance to worry about, security and emergency call buttons/ pulls in every room. And all for £4,800 pa.

@HaroldTheStallion it's the service charges- we've got a couple of lovely developments in and around Bath- service charges around £8k a year! You get a lot for your charge but many people unless they scale down hugely don't have that amount to pay out just for service charge.

But 4,800 pa is a lot if live for another 20 years or so. Does it include food? What's included in the service charge?

Maybe the issue is it is rural? A lot of the elderly don’t want to drive anywhere and like to walk to the shops etc.
Anyway, drop the price!