CMA Recommends Adoption

The CMA have produced their year long study on the housebuilding market, one part of which relates to privately managed estates. They acknowledge what we have been saying all along that we are being fleeced and recommend to government adoption as the default going forward. They also suggest that government considers adoption for existing privately managed estates and this point is what we need to hammer home in our lobbying.

You can read their full output (and there is a lot of it!) on their housebuilding page.

Below are some relevant sections from the summary document:

Their summary findings:

Finally, we have identified significant consumer detriment arising from the private

management of public amenities on housing estates. We conclude that, as a result

of the proliferation of this model, households face detriment in the form of:

● the charges they pay,

● the quality of amenities available to them,

● the quality of management services they receive,

● the potential for disproportionate sanctions to be applied for outstanding

charges, and

● the significant efforts that households sometimes have to make to achieve a

satisfactory outcome.

We consider that if the status quo is maintained, aggregate detriment is likely to

worsen over time.

We have also observed a growing trend towards private management of public

amenities on housing estates. These arrangements often come with inadequate

protections for consumers and create significant detriment for households over an

extended period. These raise a number of concerns from the perspective of

consumers:

(a) Homebuyers may be poorly informed about important details about those

arrangements and their long-term implications.

(b) Unadopted amenities may not be constructed to an acceptable quality or may

not be maintained to a satisfactory standard by the management company.

Homebuyers attempting to resolve issues may face poor levels of customer

service. It may also be unclear who is responsible for maintenance.

(c) It is often very difficult for households to switch management companies and,

in some cases, there appears to be no feasible way for them to do this.

(d) Bills can be large, with a high proportion relating to administration or

management fees, and future bills unpredictable and potentially very high as

amenities degrade over time.

51. The root cause of detriment for such households is the reduction in levels of

adoption, meaning that households end up paying for amenities which are used

by the public. This has resulted in a proliferation of private management

arrangements in which estate management companies may possess significant

market power and face limited competitive constraints to deliver services at a

reasonable price or to an acceptable level of quality.

We are making recommendations to governments in those areas where

we see opportunities to improve market outcomes within the current broad

market framework and which do not involve significant trade-offs with other

policy objectives which are outside the scope of the CMA’s study and which

would involve wider political choices, specifically:

(i) The private management of public amenities on housing estates. We

have observed a growing trend towards the private management model

and that these arrangements often come with inadequate protection

and create significant detriment for consumers. Our recommendations

to the UK, Scottish, and Welsh governments are aimed at preventing

the proliferation of private management arrangements on new housing

estates and providing greater protection to households living under

private management arrangements. We also invite these governments

to consider options to support the adoption of public amenities on

estates currently under private management arrangements;

These are just selected paragraphs fro m our initial reading – watch this space for more to come!!