McCarthy & Stone has been dealt a severe blow by the government’s ground rent u-turn.
The decision to reverse the exemption from the ban for retirement housebuilders was unexpectedly announced yesterday as part of an overhaul of the leasehold system in England.
McCarthy, which is in the process of being bought by Lone Star, had lobbied against the ban saying it relies on millions of pounds of annual fees in ground rents to help pay for the construction of the communal areas it provides.
It said that without the ground rents, which average £466 pa per property, it would have to sell homes for higher prices.
Lone Star secured shareholder approval for its takeover of McCarthy & Stone last month. It agreed to pay 120p a share for the company, valuing it at £647m.
