Entitled FAR FROM PRIVATOPIA: PRIVATE RESIDENTIAL ESTATES IN ENGLAND AND WALES this paper brings together research by Professor Susan Bright, Professor of Land Law, New College, Oxford and was published in January 2022.
The issues HorNet have learned and shared over the past 5 years or so are all mentioned, particularly the lack of transparency and redress and the fact that most buyers have not been aware of what they were getting into.
Very significantly the lack of sustainability and threat to community cohesion of this model are mentioned We are particularly keen to get this across to policy makers and are currently working on this.
We have been contacted by a Residents’ Group who have successfully taken over management of their estate. They thought their experience would help others, and so do we! We are very grateful for the sharing.
We would like to say again that there is huge variation in how the developers set up each estate, so not all will have the advantages in company structure that this example benefits from. In spite of having the required company structure the builder and their appointed managing agent strongly resisted the residents’ taking over. We have heard similar stories from others.
Also remember that it is developers who drive this model, whilst councils may have reduced landscaping and road mending costs, the community loose out when estates are retained privately because other potential section 106 benefits are lost. The estate in this example is not built up to adoption standards and we believe this also is a prime cost saver for the builders.
That said, if you want to know what worked for one group of residents, read on ….
An unusual private estate which illustrates some key points that we have been making for the past 5 years!
Sadly, we have become accustomed to green open spaces within estates and even adjacent country parks being funded solely by the estate dwellers, but this is a unique variation on the theme! The scale of the unfairness is so great it is almost unbelievable and little wonder estate agents are so coy about it.
Sovereign Harbour has 3400 homes who also pay for flood defences which protect the whole surrounding area. Our understanding is that they are the only contributors to this maintenance cost, together with harbour maintenance costs without exclusive use. One resident feels so strongly he has published a page on his web site dedicated to the set up there. Click on Image above to visit Sovereign Harbour site.
Although the main focus of the event is leasehold issues, we have a leasehold like model with private estates without the legal protections of leasehold! We work closely with the NLC as the issues are interrelated and leasehold residents also pay estate charges. It is not just a “fake freehold” problem. We have the full support of the organisers to join them.
There will be an opportunity to talk to MPs, and you could make yours aware of the event and ask them to come and support it.
If you are in our FaceBook group you could link with other supporters before attending.
May 2021 has been a busy month with the Queen’s speech, a research report from Cambridge University for the Ministry of Housing Communities and Local Government plus interesting commentary on residential property builders in the SundayTelegraph from Liam Halligan, economist and writer.
The Queen’s speech finally announced the governments’ intention to enact their promise to reduce ground rent on new leasehold properties to peppercorn. This was always going to be the governments first step in leasehold reform. We have yet to see what will be done for existing leaseholders, but the government’s commitment to common hold seems genuine with the recent formation of a Council as a consultative body including National Leasehold Campaign membership – well done NLC!!
We at HorNets have always regarded the abuse of the leasehold system as a priority for rectification, but we need to keep pushing for reform of estate charges as well. It is very disappointing to read that the Cambridge researchers have not even questioned if estate charges are necessary and the what might be the best way to manage new estates for the community. They appear to have taken on board industry lobbying and accept private management as the norm. If we cannot counter this effectively, then all that will happen is some form of regulation and redress scheme which will effectively legitimise this type of management of estates for the future. Our supporters have very clearly in our recent survey indicated that only adoption or equivalent public ownership and management will address all of the problems of private estates. The survey is still open and currently stands at 82% supporting adoption. No one is really taking seriously yet the unknown and unlimited liability home buyers are taking on for estates which have been constructed to sub adoption standards. We plan a further campaign to highlight this.
The government also announced in the Queen’s speech a relaxation of planning laws with the aim of releasing more new homes. This is really horrifying in the light of all the building defects which are emerging post Grenfell due to inadequate regulation and profiteering. It is the property and construction lobby which spreads the myth about hold ups due to planning to disguise their hoarding of plots already granted and their slow release onto the market to maintain high prices and profit. The economist Liam Halligan refers to this practice in a recent article in the Sunday Telegraph in the context of arguing monopolistic companies which are too large and have no real competition are dominating markets and require more effective regulation than the under – resourced and under – supported CMA can deliver. We noted with regret the resignation of Lord Tyrie as chairman of the CMA last year and Liam Halligan is of the same view. If you want to hear more about Liam Halligan’s analysis of the housing market, he has written a book, Home Truths, published in 2019 or you can view his webinar with Middlesex University here.
On a positive note, work is going on in the background on policy making and we plan to look again at mounting a legal challenge over misrepresentation and anticompetitive practices in private estate management to nudge the CMA into action.