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.

From the start, we have felt that the model is unfair, as we also pay council tax. Estate home buyers are paying for public amenities and for poor quality infrastructure which is likely to be expensive to maintain the future. The full nature of the liability is deliberately hidden at the point of purchase, usually being described as a charge for grass cutting/ landscape tidying. There is usually no choice of managing agent and where there is a self management type of company, it had proved hard for residents to take over from the builders.

Likewise no choice is being offered by the big builders in the type of estate management so people cannot choose to buy on a council adopted estate with its attendant higher build specifications. They just aren’t offering up their developments for adoption. It saves them a lot of money! Councils have difficulty trying to enforce adoption as there is no central government policy requiring it.

We have discovered, mostly from talking to each other across the UK, that there is no standardisation in the structures covered, the legal arrangements in the deeds or in standards of maintenance.

Even more concerning is the lack of quality control at the point of handover to the managing agent or residents management company to ensure the grounds and amenities are up to standard.

There are no regulations to protect estate residents of any tenure from exploitation by managing agents or rogue resident directors. Overcharging is rife and work not done.

We trust the CMA will find sufficient evidence of consumer detriment in this part of the housing market.


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2 Replies to “A Ray of Light from the CMA”

  1. Good luck with the campaign! Having lived in 4 properties with estate charges, and being embroiled in all the problems they cause (including neighbourhood disputes!), we finally moved to an older property to escape them. We would love a new build again but refuse to pay charges additional to already exorbitant council tax.

  2. The houses on our estate are almost built,but the POS,ROADS,SEWERS,ACCESS,TREE PLANTING and general environmental issues outlined in the original planning application are still not complete after 5 years of construction !! No maintainence bills have yet been issued but for sure they wont be long. The developers will leave the site unfinished and move on to their next fleecehold.
    I bought as freehold through a conveyancer that must have known(or should have) that my house was tied to the land in perpituity-FLEECEHOLD !! Morally indefensable, knowingly corrupt and supported by an industry riddled with fat cats driven by greed and completely aware of what they are doing. I pray to God that one day they will be brought to justice for the misery they have inflicted on millions of innocent home buyers throught the country, but stay strong everyone and thank you to the founders of Hornet without whom im sure we would all be ignorant of the gross indecency that has been perpetrated on us all.

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