15th Oct 2018 18:19
LONDON (Alliance News) - McCarthy & Stone PLC said Monday is "pleased" with the UK government's latest consultation on leasehold reform and capping ground rents for future new-build housing.
The Ministry of Housing, Communities & Local Government is proposing to allow an exemption for the retirement community sector to continue to charge ground rents after they have been capped elsewhere.
"Today's announcement is a positive step for the retirement community sector and, more importantly, our customers. However, we recognise that these are still proposals. We will continue to work closely with government and will respond to the consultation paper in due course," John Tonkiss, chief executive officer, said.
The retirement housebuilder said the proposal recognises the "unique way" the sector uses ground rents compared to the mainstream housebuilding industry.
According to McCarthy & Stone, the retirement sector capitalises and sells the ground rent income to recover much of the construction costs of the "significant" shared and communal areas within its developments that are "integral to the retirement living lifestyle".
The company believes charging ground rents in retirement developments therefore "enables average selling prices to be maintained in line" with the wider property market.
The company said: "This is essential to ensuring the government meets the critical need for specialist elderly accommodation caused by the UK's rapidly ageing population."
Shares in McCarthy & Stone closed up 0.1% Monday at 127.30 pence each.
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