Exclusive research for the BBC has revealed that around half of new-build retirement homes sold over a ten-year period were later resold at a loss, with some properties losing more than 50% of their value. The study, conducted by the Elderly Accommodation Counsel (EAC) charity, analysed thousands of Land Registry records for homes built between 1998 and 2012.
The findings show that 51% of retirement properties built and sold between 2000 and 2010, and resold between 2006 and 2016, suffered a loss. For those that declined, the average loss was 17%. The situation was worse for properties sold between 2005 and 2007 and resold between 2012 and 2014, where more than four-fifths fell in value.
Adam Hillier of the EAC described the scale of the falls as 'startling' and said the reasons were unclear. He suggested that a 'new build premium' and under-investment by developers after construction could be factors. The trend has continued, with nearly two-thirds of retirement properties sold between 2008 and 2010 and resold between 2015 and 2017 selling for less than the original purchase price.
Residents of Burlington Court in Bridlington, East Yorkshire, have seen prices more than halve since the development was built around a decade ago. One flat bought new in 2006 for £166,000 was resold for just £70,000 in 2014, while another bought for £140,000 in 2008 sold for £58,000 last year. Ken, 91, who paid around £180,000 for his flat in 2008, now expects his children to get only £60,000 to £70,000, calling the situation 'criminal'. Margarete, 92, who paid nearly £150,000 eleven years ago, said she would be lucky to get £40,000, preventing her from moving back to Germany.
McCarthy and Stone, the largest developer of retirement homes, argued that the figures do not account for incentives given to original buyers, which effectively lower the purchase price. The company said it had worked to improve resale values, including extending leases and retaining management, and that the majority of its retirement apartments increase in value on resale. It acknowledged that some older properties had not performed as well, citing local property market conditions.
