When Ashley Smith’s mother Beryl’s dementia worsened, they knew she needed more help as she could no longer cope with independent living.
So he and his wife Anne, both 62, were delighted when she managed to buy an older persons shared ownership (OPSO) extra care flat in Sutton, London, near where they lived as it seemed the perfect solution.
The couple, who have three children, said the one-bed flat was ideal while she lived there – but problems soon began after she died in June 2019 at the age of 91 and Ashley realised he had inherited a nightmare.
The flat cost £105,000 when Beryl bought it in 2017 under 50 per cent shared ownership, a government-backed scheme, in which most people can purchase between 25 and 75 per cent of a property and pay rent on the rest, increasing the percentage they own over time.
OPSO operates the same but is only available for people 55 and over with a maximum of 75 per cent ownership at which you will no longer pay rent on the remaining share.
Ashley said: “My mum had been a widow since 2011 after my father Leonard died and she lived in Bristol. We supported her to buy the flat as her dementia became so bad that she was not capable of independent living and needed to be near us.”
Anne said: “Beryl had got beyond the point where she could control her own TV set or access her bank account. But she was still with it socially, even though she had lost the ability to do some things independently.
“If we had put her in a conventional care home, she would have been well aware of it and been desperately unhappy as she had always been very clear that she did not want that sort of setting.
“We were happy when the housing association said they would take her in the extra care flats near us.
“While she was alive, it was a really good solution for her. It met her requirements to feel like she had her own flat. But, at the same time, she was in an environment where there was a 24/7 care team on duty and a community of people around her so she wasn’t lonely.”
Beryl moved into the flat in December 2017 and died in June 2019. Ashley inherited the flat, but it was a “zero-value” inheritance in their eyes as they had extended their own mortgage to raise the money for Beryl to buy the flat.
“All we actually wanted was for the flat to sell and for us to bring our mortgage back to what it would have been,” said Anne. “We said we would only recover our costs and the interest we had paid.”
When the couple first put the flat up for sale, they put it on for the same price that had been paid for less than two years earlier. When it did not sell, they reduced it but the estate agent told them it was not the price that was the issue, but the service charge and restrictions.
Anne said: “When Beryl was living there, the service charge and rent was about £550. But after her death, even though the flat was empty, we had to pay the full costs on everything.
“We were paying the housing association, Housing 21, £858 a month for service charges and then all the other costs. We were liable for the rent on the landlord’s share as well as 100 per cent of the service charge.
“We tried really hard to sell the flat, but we couldn’t. It was a lovely flat and we had fully redecorated it.”
The couple say that the process for selling OPSO extra care properties is stacked against shared owners and their families. The rules of OPSO also meant they could only sell to someone who met the criteria.
Ashley and Anne say they asked Housing 21 for permission to sublet the flat as they felt it was “exceptional circumstances” – but they were refused.
Meanwhile, the costs kept mounting up. By the end, it was costing them over £1,500 a month. The couple asked Housing 21 to buyback their share of the flat, but they refused.
They tried every avenue they could think of to fight back, but realised there was no independent authority exercising any scrutiny.
Eventually, after three years and 11 months, Housing 21 gave a buyback offer in 2023 – at £84,000, it was only 80 per cent of the price paid for the flat in 2017. Ashley and Anne felt they had no choice but to accept it to free themselves of the flat.
The couple calculated they lost more than £63,000 including £26,105 of service charges and rent, £8,047 in mortgage interest, £4,809 in council tax, £513 in electricity, £3,270 in marketing, valuations and legal fees and £21,000 capital loss at buyback.
Anne said: “We went through psychological torment that was dragged out for years. It was so painful to watch so much money leaching away from our family. All to pay for no services, to no resident, in an empty flat.
“We couldn’t even remove my mother-in-law’s possessions from the flat because the council would double the council tax if we did. Ashley had no closure for almost four years after his mother’s death.”
Anne added: “It just seems so cruel that the housing association did not lose money over the whole time it was empty compared to what they would have got if they were living there. But they still wanted this bite out of the capital as the ransom for letting us go free.”
Sue Phillips, founder of Shared Ownership Resources, which champions the rights of shared owners, said: “It is clearly wrong that a publicly subsidised retirement home scheme should result in such financial and emotional distress for families of residents who have died, or moved to access specialist nursing care.
“In some cases, older persons shared ownership extra care homes take considerably longer to sell than the resident actually lived there.
“When it comes to retirement communities, around two-thirds of residents are over 80, with nearly a third over 85.
“This inevitably means that families can inherit OPSO extra care properties relatively soon after a parent first moves in.
“It is unfair that families like Anne and Ashley are finding out the hard way that the resale process is stacked against them, as for other families in similar situations.”
A Housing 21 spokesperson said: “We understand how important it is to have the best support in place for those selling a shared ownership property after the death of a loved one.
“This situation relates to events from several years ago. Since then, we have made significant improvements to our approach, including changes to our buyback process and wider improvements to the systems, support and guidance available to customers and their families. We continue to review and strengthen our approach wherever we can.
“Shared ownership buybacks are a complex issue in the social housing sector. We welcome constructive discussion about how housing providers, policymakers and others can continue to improve outcomes for older people and their families.”