Retirement flat runs into resale barrier: Disposing of a parent's final home can prove tricky

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The Independent Online
ANYONE buying a retirement home for an aged parent has to be aware that it is likely to be for sale within the not-too-distant future and that when they sell it might not be easy.

It all depends on the location and popularity of a development, and the resale factor is something to consider when making the original purchase.

Ruth Cooper has been trying to sell her late father's one- bedroom flat for more than three years. She has advertised locally, contacted local churches who have put it into their magazines, but to no avail. Estate agents are no good as they do not understand that they have to sell the concept of a 24-hour alarm service and other special features.

'We have done everything we can to sell the property, which is in a nice development, but the age restriction has been a problem,' said Mrs Cooper.

The flat is in Sydenham, south-east London and although the development, built by McCarthy & Stone, is a perfectly good one it is in a small catchment area where you would retire only if you lived locally, thus cutting down possible buyers.

Ole Dideriksen, Mrs Cooper's brother-in-law, who guaranteed the mortgage on the flat, says: 'We bought the flat in August for pounds 59,950. We were happy to guarantee the mortgage because both Abbey National and Peverel (the management company) were confident we would easily get the money back.

'It was originally on the market for pounds 60,000 and we have gradually reduced it, as advised by Peverel and our own research of agents, down to pounds 39,000.

'We have not sat back and waited for something to happen. We have advertised in the specialised retirement magazines, used the Elderly Accommodation Council and Sheltered Housing Services - the latter was useless. The best response we got was from advertising in church magazines but we got nowhere because they were not established enough. If I was the right age I would live there, it is such a nice flat.'

Howard Packman, director of Sheltered Housing Services, which sells new and resale retirement homes, says: 'The age restriction should not be a problem because that is what the properties are built for. The main trouble has been the horrible market. People have not been able to sell their larger houses to move into a retirement flat or house.

'We don't keep in touch with everyone because we have 300 to 400 properties on our books but we write annually to check the property is still for sale.

'But the market is moving forward now. We are selling as many resales as new this year. Two years ago there were only 5 per cent second-hand. I know there are several flats for sale at this development. There are just not that many people looking and I think Homewalk House (the name of the development) is just not that popular.

'It won't make much difference reducing the price if there are not the people to buy. But I am sure the flat will shift this year.'

Not only have Mrs Cooper, her brother and sister, not been able to realise their inheritance, they have also had to pay maintenance charges ( pounds 730 a year and pounds 200 ground rent) since the flat has been empty.

Peverel Management Services, which used to be a subsidiary of McCarthy & Stone, but parted company last year, has a designated resales team on each development and charges 2.5 per cent if it sells the flat.

Nigel Bannister, managing director of Peverel, says: 'We act as any other estate agent and are running a series of advertisements in a national newspaper for resales, which has been very successful. We used not to allow sale boards at sites but we have decided, because of the difficult market, to do so. We will be doing this at Sydenham, so that should help. In fact, we have recently sold four resales there from between pounds 36,500 to pounds 41,500.

'When the flat was first on the market there were some new ones to sell, which wouldn't have helped. Now there are only resales, and as four have just gone there should be less competition for their flat. The market is certainly improving, but we will look again at this flat as it is proving difficult to shift.'

Mr Dideriksen is not happy with Peverel. 'We had a letter from them in the second year saying that they had stopped advertising because it was too expensive. Then in December 1993 they wrote saying the market had improved and they were making a new effort but we have still seen no results.' The Cooper family also tried to let the flat but unfortunately got caught up in the change of Peverel's ownership and management and the flat was passed from Girlings, a specialist retirement property company in Devon, to Peverel and back again without any response.

Other retirement developers are also looking more closely at what to do with their re- sales as it does reflect on the company if too many remain unsold.

Jackie Aldridge, resales manager of Pegasus, says: 'We have just started a resales service because Michael McCarthy, the managing director, is aware that it is important for the development to continue being occupied. Instead of charging a percentage, we charge pounds 395 plus VAT a year, for which we will advertise nationally and circulate all our other branches. The market is much more positive now and we are having no problem with resales. A flat in good condition should hold its price and we have sold three for pounds 2,000 over the original price.'

(Photograph omitted)

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