We love this term! Used by the BBC in its reports today online and on several local radio stations. Finally someone is picking up that estate charges as they are being applied across the UK today are the next scandal waiting to break in the housing sector.
We will post up some audio clips when they become available – in the meantime, please comment here if you are affected by the estates charge issue – we would love to hear from you. Remember your comment will be visible to the public!
The report of the governments select committee enquiry into Leasehold Reform is now published. It is clear that this group of cross party MPs has not had the wool pulled over its eyes by developers, investors and property managers. It has come out very strongly in favour of actions which would help to correct the power imbalance towards ordinary home buyers in the leasehold sector. These include making it easier to buy the freehold, scrapping ground rents, regulating service charges, making common hold the default tenure for any properties with shared space/buildings.
Although the enquiry title refers to leasehold, its remit did include estate charges, and our own written evidence was accepted by them.
On estate charges, they are recommending full leasehold style rights for home owners and also the possibility of common hold for estates in future.
We welcome their acknowledgement that there is a problem over estate charges, but feel these measures do not go far enough, especially in relation to the construction of sub standard estates when there is no intention for them to be adopted.
The report recommends an investigation into mis-selling leasehold houses with involvement of the Competition and Markets Authority. We think this equally applies to estate charges and we intend to develop and announce shortly a strategy for reporting to the CMA.
This Sunday Times Article from 24th February 2019 exposes just how expensive the private managed estate model is, no matter who collects the “tax”. A large “new town” development in Devon with a high proportion of affordable housing caused such concern for the local town council about non-payment (or non affordability?) of the estate fees that it took over the rent charge and manages it via a very large precept on the council tax – around £370 per year!
Although this scenario is unusual in our experience as most new build developments have either a private company or a housing association managing them, we do feel it highlights the need for developments to be constructed to adoption standards and adopted by the council in the very beginning. This avoids sub standard construction which is expensive to keep up, gives the council an advance from the developers for the first 10-20 years maintenance and gets rid of a huge volume of unnecessary legal expenses and delays due to the involvement of a management company with every single home when it is bought, sold or remortgaged.
Produced in response mainly to the Housing Minister, Kit Malthouse, following his contribution to the Westminster Hall Debate on 22nd January 2019. We are getting similar messages in reply to our own representations from the Department for Housing, Communities and Local Government. These defend the status quo on voluntary adoption and local 106 agreements passing the buck back to Local Authorities and disregarding the role of their own National Planning Policy Framework. There is also a reluctance to rise to the challenge of creating legislation to cover estate charges, although we do note that recently there has been a slight shift towards talking about a legal framework rather than simply access to the First Tier Property Tribunal. We have reports of two cases where the FtT has been unable to hear freehold estate charge cases due to the lack of legislation.
Helen Goodman MP has organised a Westminster Hall debate on estate charges. It is on Tuesday 22nd January at 4.30pm. It is not too late to email your MP to ask if they could support this initiative to put pressure on the housing minister to act and address the problems we are facing.
We are all grateful to Helen Goodman for continuing to push for change and hope that other MPs with constituents suffering from unregulated estate charges will support her.
The second reading of her 10 minute rule bill is also due this week, on Friday 25th!
Our FaceBook group has nearly doubled in size from 2300 to 4300.
We have 400 estates reported by members on our database.
All members have been working hard to successfully raise awareness of how estate charges impact on home buyers and on the estates themselves, culminating in Helen Goodman MP presenting a 10 minute rule bill on the subject with broad cross party support. This would not have been possible without HorNet members efforts in writing to their MPs, taking part in media articles and reporting the extent of their problems to us.
Congratulations and thank you! We look forward to a 2019 where we grow in strength and voice to further influence government policy to change the law and abolish the private estate model for residential developments.
We thank all our members for submitting details of their estates – keep them coming!
We are starting to use the data to support our campaign, as there are nearly 400 estates on our database now. If anyone would like an up to date spread sheet extract (CVS file) to use in campaigning please drop us a line using our contact form.
From the information we have to date we have picked out the house builders and the managing companies which appear more than once, and here is the “Naughty List”. All of these firms are involved with either creating or maintaining private managed estates.
Bovis – Redrow – Persimmon – Taylor Wimpey – Gleeson – Morris – Miller – Barratt – Bellway – Keepmoat – Linden – Countryside – Bloor – Crest Nicholson – David Wilson – Charles Church – Harron – Kier – Bett – St Modwen – Avant – Ben Bailey
We have an amazing opportunity to say what we think, and as “consumers” of estate charges we are the experts. Please spend some time completing the governments questionnaire, every single answer counts!
Far be it from us to put words into your mouths, in fact the opposite is true, you have given us the evidence for our campaign message and put words in ours!
Just to make it a bit easier, here are some thoughts you might want to consider before you answer:
Question 22 and 23 relate to estate charges on freehold (fleecehold homes), if you are a leaseholder, please answer as many questions as you can. It is not necessary to answer questions which don’t apply to you.
The government have totally failed to recognise that estate charges are onerous terms for leaseholders on private estates as well. Their focus on freehold home owners is too narrow, and whilst regulation might improve standards of service and value for money in some cases, it is not the answer, and would only prop up a system created by developers to deliver sub standard estates on the cheap and then have their mates run them at the expense of the home owners.
Information from HorNet has helped Bishop Auckland MP, Helen Goodman, draft her Ten Minute Rule Bill which was laid before parliament on November 14th 2018. In her speech she covered the major aspects of the estate charges scam most eloquently. You can hear it here in full or shortened version.
HorNet co-ordinators were invited to Westminster to hear the bill being presented and meet with the many cross party MPs who supported it.
At present the government is looking at giving leaseholder type rights over estate charges, including redress via the First-tier Tribunal and Right to Manage giving choice of service provider.
However, this approach totally ignores the “21st century blight” referred to in the bill. Developers are using this model to construct estates of low quality and save themselves hods of cash. The long term liability for this falls on the estate dwellers via costly repairs of defects down the line. Hanging on to the land also gives developers the opportunity to further monetise it in future should planning conditions change and allow for extra houses to be built.
On many larger estates, there are areas of open space which benefit the general public, it is fundamentally unfair that a small section of the community should pay for the upkeep of these spaces.
Regulation and redress are simply not enough. We know from our friends who are leaseholders that it doesn’t work for them, so why should it work for us?
You have to ask yourself why estate residents should have to spend a great deal of time and effort forming and running a Right to Manage association to maintain land belonging to a private company, which may also be used and abused by the wider community who make no contribution.
In its recent report to the government, the Law Commission put forward the idea of enfranchisement for estates. This would mean that estate residents would be able to purchase the freehold of the estate, much as flat owners can do for their block, then owning the shared areas in common. The residents would manage the estate through their own appointed agent directly accountable to them. This would be a definite improvement on the current situation, but still does not address the defects in construction which may be taken on or the unfairness of an estate providing a public amenity.
We believe that the only solution which addresses all of the issues for home owners and the future quality of the estates is compulsory adoption, and will continue to lobby for this.