Britain's retirement home ‘scandal' is another Labour betrayal of pensioners

Telegraph

18-05-2025

For three years, Jeff Clarke has paid £900 a month in service charges for a retirement flat he does not occupy.
The property belonged to his 95-year-old mother, Dora, who left it vacant when she moved into a care home.
Finding a buyer is proving difficult, but keeping on top of the service charges is nigh-on impossible. Now, he is being forced to sell his own home to keep up with the charges and his mother's care fees.
Mr Clarke, 71, from Windsor, is one of dozens of readers who have complained of sky-high fees on their retirement homes – leasehold properties designed for the over-55s.
Labour is facing fresh criticism for failing to 'get a grip on this scandal' and delaying reform of the sector.
The Leasehold Reform Act 2024, introduced by the Tories but pioneered by the current Government, has promised an overhaul to service charges and banned developers from selling new houses as leasehold properties.
But it notably exempted retirement homes from the proposed ban – a loophole Labour has failed to close. Campaigners said it amounted to yet another betrayal of pensioners after 10 million retirees were stripped of winter fuel payments.
And families like Mr Clarke's have been feeling as though they have a 'millstone around [their] neck.'
Dora first moved into Lynwood retirement village in Ascot in 2017 when the service charges were just £518 a month.
Five years later, her health seriously deteriorated and she was forced into a care home. In that time, her service charges also rocketed by 73pc.
It means her son is paying for both her service charge and an extra £1,000 towards the care fees.
The Lynwood flat was put on the market for £350,000, the price it was originally bought for, but the price has since been cut to £250,000. Even so, it has had just seven viewings in three years.
Mr Clarke cannot turn the electricity off at the property in case it is needed for a viewing. As a result, he claimed he has to pay an extra £20 a month for the standing charge.
To make matters worse, last week, he was invoiced £96 for a new energy performance certificate, which he said 'rubs salt in the wound'.
He now plans to downsize from his current home. The decision was in part due to the service charges, but also a serious accident which reduced his mobility.
The situation is even more catastrophic for Dora, whose investment in the flat has evaporated.
He said: 'My mother now has nothing. She doesn't have a penny to her name.'
Lynwood Village is run by automotive charity, Ben. Small print in the contract means that once Mr Clarke does manage to sell the property, he will have to pay the provider 1pc of the sale price for every year the flat was owned.
Rachel Clift, chief executive of Ben, said property prices at Lynwood Village are 'stable and sales are steady', but acknowledged it can take a while for properties to sell in this 'niche sector and difficult market'.
She added: 'We are sorry to hear about the challenges that this individual has experienced. We are fully committed to providing a supportive community, and we would be happy to speak with this individual directly to explore what else we can do to help.'
Retirement homes are leasehold properties, usually with leases of between 125 and 999 years, and are specifically designed for over-55s. They boomed in popularity during the 1980s and remained attractive well into the early 2000s.
As of 2019, there were 730,000 retirement housing units in the UK, according to the Elderly Accommodation Counsel.
However, in recent years, their appeal has dramatically waned as complaints mounted among those early buyers. This is due to their hefty service charges, which are payable whether or not the property is lived in.
Owners must also pay ground rent, generally between £400 and £500 per year. Ground rent has since been banned on the sale of new retirement homes but this does not apply to re-sales.
The issue has been compounded by the double council tax raid on second home owners which has swept up the families inheriting these properties.
The Leasehold Reform Act 2024 was brought in by the previous Conservative government to strengthen leaseholder rights. It aimed to improve the 'transparency of service charges and give leaseholders a new right to request information about service charges and the management of their building'.
But it contained loopholes which allowed developers to sell new houses as leasehold properties, for instance if they are part of a retirement village.
Helen Whately, shadow pensions secretary, said: 'This is yet another example of Labour not keeping their word. It's just like when they said they wouldn't remove the winter fuel payment, only to then betray 10 million pensioners the first chance they got.
'With each day it becomes clearer their pre-election promises aren't worth the paper they were written on.'
Dennis Reed, of charity Silver Voices, said: 'In some cases, the service charges amount to daylight robbery of vulnerable older people. It is essential that legislation provides a fair framework for such charges.
'Older people are already struggling to cope with rising energy and food prices, cuts to winter fuel payments, poor social care support and large council tax bills, so we need extortionate service charges in retirement flats like a hole in the head.
'The Government must get a grip on this scandal'
In April 2024, Labour U-turned on its own promise to scrap leaseholds in its first 100 days of power.
Instead, it pledged to 'bring the feudal leasehold system to an end' without committing to a timeframe.
In March, the Government published the Commonhold White Paper, which will be followed by a draft Leasehold and Commonhold Reform Bill in the second half of this year.
Again, retirement homes will not benefit from exemptions and were excluded from the recommendation to ban exit fees.
It means owners like Ann Townson will have no protection from soaring costs.
The 78-year-old moved into a retirement village in Harrogate. At the time, it seemed like the 'ideal solution' as she struggled with health and mobility issues.
However, now she cannot keep up with the service charges and ground rent which cost her £1,047 a month, which has rocketed from £731 when she first moved in four years ago.
She said: 'It will use up all my savings as the cost per month takes up more than half of my pension. You have absolutely no control over the costs.
'I would never have moved here if I had known what I know now.'
Paula Higgins, of the Homeowners Alliance, said: 'Retirement homes should not be exempt from plans to ban leasehold houses.
'Buyers of these properties often face huge hidden costs. In many cases, it's the children who are left to shoulder these financial burdens after their parents pass away.'
A spokesman for the Ministry for Housing, Communities and Local Government said: 'Far too many leaseholders across the country are being asked to pay unreasonable and extortionate charges, including people living in retirement homes.
'We are determined to fix this, which is why we will consult this year on detailed plans to drive up transparency of service charges and hold landlords to account for the money they spend.'