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!!
