UK's most powerful retirement community property developers conspicuously absent from ARCO roster

Why have neither McCarthy Stone nor Churchill Living joined the UK's most successful governing body or committed to their framework of consumer protection?

The ARCO Consumer Code

The Associated Retirement Community Operators (ARCO) is the main body representing the integrated retirement community industry in the UK. They are widely respected for the work they have done in creating a Consumer Code for their business members.

Since 2012 ARCO have been working to improve confidence in the sector, ensuring that all members are providing a high quality service to their residents. One of their main tools is the ARCO Standards and Compliance Framework and this in turn is underpinned by the ARCO Consumer Code.

This code was created in 2015, to set high standards and provide the benchmark for good practice for retirement community developers and operators. The code provides guidance and regular assessment of ARCO members' business practice. It is acknowledged throughout the industry as a comprehensive, well-written consumer code and an excellent blueprint for improving commercial behaviour.

The Chartered Trading Standards Institute (CTSI) formally approved the code in 2025, providing both members and consumers access to ombudsmen and dispute resolution.

Retirement Community giants

The two biggest names in UK Retirement Community Property development are McCarthy Stone and Churchill Living. McCarthy are the largest operator in the sector, while Churchill are considered the fastest growing private company.

Their combined annual revenue is in the region of £900 million (with McCarthy Stone way out ahead based on their most recent publicly available audited revenue: £725 million). Between them they control almost a tenth of the £10.2 billion UK market.

Both companies have, in the past, been active in lobbying the government to free up general housing stock for retirement living communities. Due to their large combined market share, they have the abilty to submit joint representations to local planning authorities regarding planning policy for older people's accommodation, essentially shaping how councils set their housing requirements for the elderly.

Neither McCarthy nor Churchill have joined ARCO, leaving a glaring strategic gap in the organisation's sphere of market influence.

Both companies have previously cited business models that do not easily align with the ARCO Consumer Code.

Their problem with ARCO?

One of the main reasons for the recent negative media surrounding retirement community developers in general is the catastrophic loss of value their properties often suffer from. There have been a raft of articles detailing the stories of people who are either selling at a huge loss or can't sell at all.

The main reported reason for this is because the ongoing costs often increase at a rate that far outstrips inflation. Prospective buyers are put off by the high monthly expenditure required, even after buying the property itself.

Many of the owners who end up stuck with the property report to the media that they were promised the costs would not rise unreasonably. But the contracts do not guarantee any limit on increases and somehow, little by little, increase they do. One European Consumer Claims client reports an increase of nearly 60% in four years.

Ongoing costs are significantly affected by the controversial charging of ground rent.

On established UK leasehold properties it is still possible for the owner to be charged ongoing rent even after buying the property itself. The UK government is keen to abolish the concept of ground rent altogether and has already done so for new leasehold properties built recently.

ARCO agrees with the government and has always taken a strong stance against ground rent, firmly believing it has no place in the retirement community business model. Whereas Churchill and McCarthy Stone have in the past actively lobbied against the government's ban on ground rents, opposing the position taken by ARCO and its members.

The other major divergence between "the big two" and ARCO is that ARCO members are encouraged to manage the properties they sell even after the sale. McCarthy Stone prefer to sell the property and then allow third party management companies to look after the sites. Churchill Living often manage the estates after they sell the properties, but this is not exactly the same as the ARCO style integrated community management. Churchill estate management is generally limited to maintenance, clean up and communal area care.

Expert comment

"The retirement community development sector has suffered severe reputational damage over the last few years," notes Greg Wilson, consumer expert and CEO of European Consumer Claims (ECC) the firm representing clients allegedly mis-sold retirement properties in the UK. "And rightly so. The amounts of money involved are often whole-life savings. The literal living quality of elderly and vulnerable people is under threat."

"ARCO is doing sterling work in bringing order to this extremely necessary (but in dire need of regulation) industry. Any resistance to ARCO's mission appears myopic and counter productive.

"The UK government intend that ground rents will hopefully soon no longer be a legal proposition. Under the Leasehold Reform Act which came into force for most residential properties in June 2022 and for retirement homes from April 2023, new long term residential leases can no longer require payment of ground rent beyond what is known as a 'peppercorn.' Effectively zero financial cost.

"Freeholders are prohibited from charging ground rents on these new leases. It’s also illegal to charge admin fees for collecting this peppercorn rent.

"In addition there is currently a draft bill proposing a £250 a year cap on existing leaseholds, reducing to peppercorn after 40 years. This is expected to pass in 2026 and reduce costs for millions of leaseholders, including retirement communities.

"If and when the bill is passed any retirement community developers still using a leasehold based business model will be forced to rethink their business strategy regarding ground rents on their leasehold properties. This should help their property values rebound to appropriate market levels.

"For many of their owners and customers that day can not come soon enough."

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