HorNet – Stop the Rot! Adopt the Lot!

We were invited to give evidence to the commons committee stage of the Leasehold and Freehold Reform Bill on 16th January 2024. We shared the time slot with leasehold campaigners but feel we got our major message across: STOP THE ROT ADOPT THE LOT!

This is the first time there has been any real acknowledgement that regulation alone isn’t the answer. We made the point that there is a risk of legitimising a model which should be scrapped for estates which are not truly private gated communities.

The bottom line is that we were able to introduce the underlying problem of lack of adoption and describe the effects of the current system on unsuspecting home buyers.

Halima vividly described the effect of estate charges and lack of adoption in her case.

It appears that this time they listened and heard. In a later session Richard Fuller MP grilled CMA representatives and gave them “homework”. He asked for them to write to the committee ahead of their Market Study report with ideas about how the Bill could include measures for more adoption.

There is some uncertainty about this Bill being the vehicle for more adoption – it may need legislation of it’s own, but we feel that the acknowledgement of the lack of adoption as the problem to be tackled is a big move forward. We hope the next big step will come from the CMA’s Market Study at the end of February.

If you prefer to read the transcript you can do so here.

Thanks to all who have written to the Competition and Markets Authority in response to their working paper – we gave it our best shot.

Below is a link to our email on behalf of the group – you may think the language is quite moderate, but the Competition and Markets Authority have worked hard, listened, investigated and they got it. They have correctly identified that lack of adoption is the underlying problem on publicly accessible estates.

We had thought it would be a matter now of waiting for their recommendations in February, but lo and behold, the government has, after 4 years, suddenly found parliamentary time to introduce its Leasehold and Freehold Reform Bill! It feels like a race to get something on the statute book now regardless of whether the act will deliver anything like the changes needed for either leasehold or estate charges to ensure fairness to home/lease buyers. In our view both should be abolished, not polished.

For us, the fundamental mistake (??) government makes is to look to ensure parity between leaseholders and estate charge payers. A dodge which means we will be treated like leaseholders – big deal! Actually it’s a smack in the eye, as it legitimises a model which should be scrapped. We seek parity with other home buyers, not leaseholders who are an even more disadvantaged group than us.

We do not want or need estate charges on developments open to the public. They may be appropriate on gated private estates, but this is not the case for us.

If the government think they can catch any votes with this bill they have another think coming. Like so many government actions, it supports big business, not the voting public.

We are working with the NLC to pull together a way forward and will post again soon on this.

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”