(Alliance News) - McCarthy & Stone PLC on Thursday expressed disappointment in the government's recent announcement reforms to leasehold properties, particularly the decision not to include a previously announced retirement housing industry exemption.
The Ministry of Housing, Communities & Local Government posted its leasehold reform announcement on Thursday, the retirement communities developer and manager noted.
"The group is disappointed to see that as part of these reforms MHCLG has reversed its previously announced exemption for the retirement housing industry from the zero rating of ground rents," said McCarthy & Stone.
The company noted that it has engaged with the government on the issue since December 2017 and "has made every effort to highlight the way the sector uses capitalised ground rent income fairly and for a dedicated purpose: to help fund the construction costs of its highly valued shared areas."
McCarthy & Stone said these communal areas cost between GBP1 million and GBP2 million per development and have to be "appropriately funded" if they are to be financially viable. It added that it had agreed with a government proposal. as part of the exemption, to give customers a choice between economic ground rent or a higher purchase price reflecting communal areas costs.
John Tonkiss, chief executive of McCarthy Stone, said: "Following three years of engagement with government on this matter, today's news is disappointing. The retirement community industry has been caught in the crossfire of leasehold reform which was intended to address bad practices elsewhere in the housebuilding industry."
Shares in McCarthy & Stone were up 0.2% at 120.00 pence in London on Thursday.
By Anna Farley; annafarley@alliancenews.com
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