Category: The Buzz

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:

1. More adoption
2. 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 24^th 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.

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.

Continue reading “A Ray of Light from the CMA”

The CMA (Competition and Markets Authority) have recently published the responses to their market study statement of scope at https://www.gov.uk/cma-cases/housebuilding-market-study

This is not the study report, which is expected in September 2023, but responses from the industry which make an interesting read, from us and from consumers which we believe are mostly HorNet supporters. It is unusual for a government body to receive over 250 consumer responses so a huge thank you to those who took the trouble to write in during the fairly short time given for responses.

We hope they listen and look forward to their report in the Autumn.