Roller Coaster Week!

This last week or so has been a bumpy ride for HorNets, but things are looking hopeful again, thanks to Helen Goodman MP, who never misses an opportunity to push for change. In addition the fact that newly appointed Secretary of State responsible for housing, Robert Jenrick, has previously spoken on behalf of his constituents trapped in fleecehold indicating he is sympathetic and has a good understanding of the issues. This makes us more hopeful that there will be some action to help us.

Helen lost no time in writing to the new Minister and also had recently asked his predecessor in the house to support our requests for the CMA to include fleecehold mis-selling in its enquiries. Quote: “Hundreds of my constituents have written to me similarly feeling that they have been mis-sold their freehold, so I have written to the Competition and Markets Authority asking it to extend its inquiry to cover freehold, where people have to pay excessive and ever-escalating management and service fees. Will the Secretary of State support me in this?” Read the full debate here and Helen’s letter to Robert Jenrick appears below:

5th July 2019
Estate Maintenance Fees in Freehold Properties
Dear Robert,
May I offer congratulations to you on your recent appointment.
For the past year. I have been actively campaigning in the House to stop homeowners being ripped off by property management companies. I have been contacted by both constituents and homeowners from across the country who have purchased newly-built freehold properties only to
find that their property is not truly freehold. Rather than open spaces being handed over to the local authority for ongoing maintenance, buyers now find themselves legally obliged to pay a property management company to maintain public spaces around their homes. These fees lack transparency,
are uncapped, and unregulated. Service is poor— often non-existent— and the legal system favours management companies, facilitating bullying behaviour in the event of payment disputes.

I have taken action for my constituents and introduced the Freehold Properties Management Charges and Shared Facilities} Bill in November. I have also led a Westminster Hall debate,
sponsored Preet Kaur Gill’s Freehold Properties (Management Charges) Bill and written to both the FCA and CMA asking them to investigate freehold mis-selling. Your predecessor, the Rt Hon James Brokenshire MP, also agreed to investigate this on Monday of this week. I gave the correspondence
to the officials in the box.

Although I was concerned that a reshuffle might stall progress on this campaign. I was most heartened to learn that you are sympathetic to this cause. I was very pleased to come across an article published earlier this month which reports on your pledge to provide better protection to
people living in freehold properties on privately managed estates, which arose from meetings with Fernwood Parish Council. The National Leasehold Campaign have also drawn my attention to a tweet from yourself in 2011, which was supportive of Sajld Javid’s (alas unfulfilled) intention to end
rip-off management fees on freehold properties and leasehold ground rents.

This appointment provides an exciting opportunity —and I look forward to working with you to bring justice to an estimated 1.3 million households who are currently caught in this trap,
Yours sincerely,
Helen Goodman
Member of Parliament for Bishop Auckland Constituency & Shadow Minister for Foreign Affairs

The start of the week was a little gloomier, with suggestions that the CMA may focus only on leasehold mis-selling in spite of multiple submissions about fleecehold. HorNet are still arguing that the mis-selling for both leaasehold and fleecehold houses has been part of the same sales process by the same companies in the new build market. Leaseholders also pay estate charges, and we believe they also have no statutory rights over these payments as they are technically not service charges. Should leaseholders successfully purchase their freehold, they only lose their ground rent and still have to pay permission and estate charges.