Here’s a short presentation which brings together the major issues we have found from talking to home buyers and residents about estate charges over the last 5 years.
Although 2020 has been difficult in many ways and little has happened over new law making which might help us, members and co-ordinators continue to lobby for change. We have an undertaking from the CMA that they will look at “fleecehold” next after dealing with the leasehold new build houses mis selling scandal. We will continue to press them over this.
And now today on 7th January we have the great news that the government are going to act on leasehold, abolishing ground rents and making it easier and cheaper for leaseholders to buy their freehold. Most importantly, this is the first step in dismantling leasehold in favour of common hold. We believe there is no way that “son of leasehold” AKA fleecehold or fake freehold will be able to survive for long after these moves and we will press with renewed vigour for change here as well.
Congratulations to the National Leasehold Campaign and the Leasehold Knowledge Partnership for their tireless work for leaseholders rights.
We are very grateful to all of our supporters (and many others) who responded to the Welsh Government’s consultation on estate charges. Their Housing Minister has responded in this statement published on 30th November 2020. With over 600 responses, many from affected home owners/buyers, they have clearly now got a good grasp of the issues. We recommend reading the whole report – it is not that long, but if you cannot perhaps this quote summarises best what has been heard from estate dwellers:
Three actions are proposed:
Require that section 121 of the Law of Property Act is excluded from any future Help to Buy sales in Wales.
Clear information on estate charges and their implications to be given to new home buyers, and mandatory for Help to Buy in Wales.
More work to be done on looking at how public open spaces are funded on new developments – HorNet look forward to this one!
This is a time when we might feel we are in the doldrums, with a lack of government action and little prospect of any in the near future.
Such a time is a good opportunity to look at what actually have achieved.
We have gone from a position of public ignorance and government denial to a constant stream of prospective home buyers asking us more about the issues. Many are pulling out if they can, this is great – market forces may change things more effectively than new laws.
We have over 8000 members of our FaceBook group and through this and email we have developed a broad picture of the private estate model as it is being used throughout the UK, read more on the low down here. Our database of affected estates has grown to 690 and counting!
Hornets have taken part in email campaigns to MPs and in government consultations to the extent that it is fair to say government do know the essence of the problem even though nothing has been done to address it. This paper at the house of commons library is a fair summary of where they are in this commons library article.
We also were asked to brief Helen Goodman former MP for Bishop Auckland, on her 10 minute rule bill around estate charges. Sadly this only had it’s first reading before that session of parliament ended due to an early General Election. This means that any future effort will have to start over. We are still working with sympathetic MPs as the government are hiding behind lack of parliamentary time. We all know time can be found if it is their priority, whatever else is going on.
We are still in communication with the Competition and Markets Authority to act on their undertaking to look at fleecehold once their leasehold mis selling enquiry is complete. We argue that for estate charges, it is not just that there has been mi selling, but that the implementation of the model is anti competitive in most cases.
We work closely with the National Leasehold Campaign and over time have come to see that the issues of doubling ground rents, unsafe cladding and unjustifiably high charges are facets of the same underlying problem. The land and property markets are now dominated by large faceless companies, often based offshore and whose primary aim is profit. There is no longer any concept of providing good quality buildings or services since the priority is primarily shareholder value. There are third party interests in peoples homes which we believe are not necessary and do not significantly benefit the home buyer.
We found it fascinating to hear about how student accommodation has contributed to the spread of Covd19 in that population, and then into the community. We learn from the investigative TV program https://www.bbc.co.uk/news/uk-scotland-54575788 that students were encouraged back to halls even though teaching turned out to be online. They didn’t need to be there and were treated like prisoners for the most part. Apparently the universities have made deals with developers and undertaken to provide agreed levels of occupancy. If the students weren’t paying rent, it looks like the universities will have a big bill. Students suffer, we all suffer – but the money is still made. This is just an editorial opinion, but doesn’t it all look a familiar pattern?? Different groups of ordinary people needing accommodation being profit farmed. Weak institutions from central government and local authorities to university boards appear unable to see through or stand up to these tactics.
We keep campaigning – it is however important to “know your enemy”.
We are thrilled to hear that the government watch dog, the Competition and Markets Authority, are taking action against a sample of the national volume housebuilders over mis-selling leasehold houses. This action vindicates the work of the National Leasehold Campaign and the Leasehold Knowledge Partnership in lobbying for change and highlighting the issues for home buyers of new build leasehold houses.
You can read what the CMA have to say about their investigation here and it is clear that they are still focussing on leasehold selling practices.
This is however good news for HorNets, as they have undertaken to look at fleecehold pending the outcome of the leasehold enquiry.
What are HorNets doing about it?
We submitted evidence to the parliamentary select committee on leasehold reform in 2017, which surprisingly was accepted, but disappointingly not included in their issues for the CMA to investigate.
We have written to the CMA on a number of occasions about fleecehold pointing out not only the mis-selling, but the anti-competitive nature of the management arrangements on many developments. We believe that they know there are issues and we are optimistic that they will pick up on them – our only concern is timescales, as estate residents are being exploited right now, with further unfairness in some cases during the pandemic.
We intend to write again and ask about timescales and consider what other avenues may be open to us now that action is being taken against some of the big names.