Political Manoeuvrings

Thanks to all who have written to the Competition and Markets Authority in response to their working paper – we gave it our best shot.

Below is a link to our email on behalf of the group – you may think the language is quite moderate, but the Competition and Markets Authority have worked hard, listened, investigated and they got it. They have correctly identified that lack of adoption is the underlying problem on publicly accessible estates.

We had thought it would be a matter now of waiting for their recommendations in February, but lo and behold, the government has, after 4 years, suddenly found parliamentary time to introduce its Leasehold and Freehold Reform Bill! It feels like a race to get something on the statute book now regardless of whether the act will deliver anything like the changes needed for either leasehold or estate charges to ensure fairness to home/lease buyers. In our view both should be abolished, not polished.

For us, the fundamental mistake (??) government makes is to look to ensure parity between leaseholders and estate charge payers. A dodge which means we will be treated like leaseholders – big deal! Actually it’s a smack in the eye, as it legitimises a model which should be scrapped. We seek parity with other home buyers, not leaseholders who are an even more disadvantaged group than us.

We do not want or need estate charges on developments open to the public. They may be appropriate on gated private estates, but this is not the case for us.

If the government think they can catch any votes with this bill they have another think coming. Like so many government actions, it supports big business, not the voting public.

We are working with the NLC to pull together a way forward and will post again soon on this.


Call To Action!

The CMA are asking for comments on their recently published working paper about their current thinking on estate charges.

Its a long read, nearly 90 pages but worth going through. The bottom line is they do see (most of) the problems and offer two potential solutions:

  1. More adoption
  2. and/or more regulation of management and leaseholder type rights.

In the past we have surveyed and polled our supporters as well as just listening to their views in our social media group, web comments and emails. The overwhelming majority want full adoption of their estates rather than regulation and self management for many reasons including but not exclusively:

Regulation will not remove the fundamental unfairness of a sub set of people paying for up keep of pubic spaces/amenities.

This unfair way of managing public spaces divides communities, whereas adoption does not.

Estates which are un adopted are not built up to adoption standards. This leads to long term blight as well as higher charges for residents than for public bodies.

Private management is expensive and cumbersome with up to 50% of costs just going on management rather than service provision. Having a company for each development is unnecessarily complex and inefficient. Councils have established means of keeping track of house moves and collecting council tax as well as economies of scale in delivering services.

Regulation and redress schemes for leasehold service charges also have a power imbalance which is detrimental to the consumer. We do not see how applying this to fleecehold will work any better for estate charge challenges – especially since estate charges are of a lower order than block service charges.

Estate residents do not have the skills to manage or oversee managing agents in the increasingly complex matter of land and facilities management.

There are delays and extra expenses when selling a home with estate charges and there is no doubt that property values have been affected adversely. More regulation of managing agents will not in our view cause a recovery in value or saleability. The word is out and can’t be retrieved.

We are very concerned that residents trapped in this model will suffer an even greater loss of value and saleability should mandatory adoption not be applied retrospectively. Whilst we advocate adoption as the only solution which addresses all of the problems it must be universal to avoid further detriment to a sub set of estates.

Many of our supporters have said they are willing to pay more for their houses to be on adopted estates and also in local taxes for upkeep such as a precept for all open spaces in the area. They just don’t want to be ripped off by unaccountable private agents.

We supported this petition to parliament asking for mandatory adoption and succeeded in reaching the threshold for a response in spite of a fairly short timescale.

In section 5 of their document, the CMA are asking for comments on their thinking to be submitted by email by 24th November. If you can write to them to support their conclusions, with reference to the issues you have faced, that would be great. HorNet will be responding for the group as well, but the more the better. We do feel that the government may press ahead with their regulation agenda unless there is a firm recommendation against from the CMA. It’s our best chance to STOP THE ROT ADOPT THE LOT and it probably won’t come round again for many years, so please do email them.


A Ray of Light from the CMA

Our campaign to abolish private management of public areas/amenities on new build estates has been going now for 7 years. During that time we have had 8 housing ministers, a private members bill and numerous press articles, mostly on regional networks. There have been some promises from the government which have stood for 4 years without action. Since these only covered regulating an existing exploitative system we feel perhaps this has been a blessing in disguise as the CMA (Competition and Markets Authority) have stepped in with a Market Study which is looking at private estate management as part of its work. The study began in March and a progress report has just (25/08/23) been posted along with a press release. They are now looking at investigating the area in greater depth. This is hopeful news and we are confident that they will find anticompetitive practices which impact adversely on many new build home buyers. Thanks to all HorNet supporters have worked hard to submit evidence to the CMA. Also thank you NLC (National Leasehold Campaign) – we know you raise the issue of estate charges whenever the opportunity arises.

The CMA are considering looking into private estate management via their more formal in depth legal process (Market Investigation Referral) and we feel we should encourage them to do so as it looks to see if competition law has been broken. This may be the only way current victims could ultimately get compensated for their predicament . The down side is time – another 18 months plus, but we hope it would be worth it. Our understanding is that it wouldn’t necessarily preclude the CMA from making recommendations to the government for policy changes which could stop current practices in future. To take a look at their August 25th Update click here. It’s worth spending some time reading this 70 page document – the section near the end gives more explanation of the measures they can take.

Continue reading “A Ray of Light from the CMA”

Thank You HorNets!

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The CMA (Competition and Markets Authority) have recently published the responses to their market study statement of scope at https://www.gov.uk/cma-cases/housebuilding-market-study

This is not the study report, which is expected in September 2023, but responses from the industry which make an interesting read, from us and from consumers which we believe are mostly HorNet supporters. It is unusual for a government body to receive over 250 consumer responses so a huge thank you to those who took the trouble to write in during the fairly short time given for responses.

We hope they listen and look forward to their report in the Autumn.


Say Your Piece Update

The CMA team looking into the housebuilding market have advised us that they welcome evidence from home buyers past present and future describing their specific stories. Please write in ASAP to have your evidence considered. The investigation is in to the way this market works and not focused on any particular company.

Email to housebuilding@cma.gov.uk

We Suggest the Subject Line of: Evidence on Estate Charges

Attach relevant documents – small files if possible.

Remember someone has to read it and analyse the content so try to be concise.

You need to put in some basic details, your name and address, the name of the developer, management company and managing agent. When you bought into this, and how long you have been charged. Fake freehold or leasehold??

Tell them your story. You don’t need to use all of this – just what applies to your situation or is important to you.

Start with what you were told in the sales office.

Was your property described as freehold?

What were you told about the estate charge? Was it described as a service charge, or what?

Was it glossed over/minimised?

What did you know about it at the time of reservation?

Did you reserve your plot based on a sketchy (or no) description of the estate charge like “a small charge to cut the grass”?

Were you persuaded to use the builders recommended solicitor? If so how did they convince you?

Were you put under pressure (positive or negative) to exchange contracts quickly?

What did your solicitor/conveyancer tell you about the charges?

Did you know the full extent of the liability you were signing up to, or did you think it was just grass cutting?

If you have a rent charge, were you told this is a charge on the property, and that it could be repossessed if you defaulted on payment for any reason?

Were you given a detailed breakdown of what you would be paying for?

Did you know part or all of the estate was not going to be adopted by the council/water company?

Did you realise that you would be paying for the upkeep of public open space?

Did you understand that the management company/agent was not going to be accountable to you?

Did you realise the charges are uncapped and the figure you may have been given in the sales office was only a projection/estimate?

Did you know that you had no statutory rights like there are for leasehold service charges?

Do you have the option to take over the company when the estate is completed?

If not, do you have any choice in managing agent/contractor provision?

Have you had any difficulties gaining full control of your RMC?

Next would be how the estate is being managed and what problems you have had.

Do you get value for money?

Can you choose your managing agent?

Do they respond to complaints/queries?

Have you tried to make them accountable by with holding payment or suing them in small claims?

What did you do, and was it successful?

How did they respond?

Legal Framework/Option to self- manage

If you know what your set up is, can you describe it briefly – rent charge/chain of covenants/agreements with council under section 106 or section 38 (roads adoption)

Who owns the land? Who owns the rent charge?

If you have an option for self-management how is this working for you?

Are you a leaseholder or “fake freeholder”?

Then you could go on to describe how and when you found out the true picture and how this has affected you.

Has it affected the sale/value of your property? If so please describe.

Have there been any major unforeseen rises in estate charges since you bought your home? Please describe.

What have you suffered?

Financial loss? Can you quantify?

Health/relationship problems?

What would put it right for you?

Mandatory adoption?

Common hold ownership of estates?

Regulation of the current system??


You can download this article in Word to use as a template if you wish: