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:
- More adoption
- 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.