Housing: Flats

Baroness Miller of Chilthorne Domer Excerpts

Monday 23rd April 2012 Grand Committee

[Baroness Miller of Chilthorne Domer]

My Lords, I, too, congratulate the noble Baroness, Lady Gardner of Parkes, because this is an enormously important issue. As she rightly said in her extremely good introduction, when people are looking at these flats they are just looking for something they can afford. They are not looking in great detail at the implications of becoming a leaseholder. I must declare an interest, having become a leaseholder in Kennington in 2002. What I say this afternoon is not because I am an expert but because our block is a microcosm of the issues raised by noble Lords in this debate. We have had the issue of residential service charges which have not gone up as much as some that I have read about but have nevertheless seen a steep increase.

In terms of capital repair charges, this year we have had a projection several years forward. As our managing agents have said, this is the first time ever for this and it is a terrific breakthrough. If there were going to be regulations, a five- or 10-year forecast should be obligatory and would help tremendously. Last year, the surcharge for external works was £2,000 on a two-bedroom flat. That is a huge amount when it has not been foreseen more than 12 months before. Not many people can just find £2,000 in a year.

If you happen to want to sublet your flat, there are charges for assignment of leases. This is an issue because if someone is marginal about subletting it might put them off. At a time when accommodation is at such a premium, we want to make sure that those charges are at least proportionate to the work done. I have come across charges for assignment of a lease where it was going to someone who was already a tenant in the block and was simply moving flats, so the taking up of references was pretty academic.

The issue of insurance was highlighted in the London Assembly report. Interestingly, it highlighted terrorism as one of the unnecessary things to insure against. Many insurance companies discount terrorism as something that you can insure against. However, in preparing for today’s debate I went back to the budgets for the block in which I live, and there was a £5,000 a year charge for insuring against terrorism. That is against the background of a number of restrictions. You cannot keep pets, you cannot keep bikes in your flat, you cannot have wooden floors and you cannot hang out washing. Perhaps all the prohibitions are reasonable. At least when we took on our leases we were aware of them.

What made the biggest difference over the decade was the revival of the residents’ association under the chairmanship of somebody who devotes a vast amount of time and energy, entirely voluntarily, to making the sorts of improvements that we should expect good regulation to make. She has made, single-handedly, a tremendous difference to the accountability of the management company. She has made it more transparent by asking lots of questions and then informing us on the structure of the freeholder and the management company, on the relationship between the two, and on the trustee whom the management company appoints. If anyone was going to speak this afternoon it should have been her, because she is a truly great expert on this. She also managed to end the perhaps unintentional divide-and-rule culture of the management company, whereby leaseholders did not come together to take on the management company over issues. Giving information about issues, and getting a consensus among leaseholders on how to resolve them, is tremendously important.

Given how difficult it is at the moment to form a residents’ management association, I hope that the Government will give at least some thought to making it easier to form one. Beyond that, I hope that they will give some thought to giving more resources to residents’ associations. I do not mean that the Government should give the resources. Perhaps the service charge could be top-sliced to give residents associations a minimal amount of funding to bring leaseholders together. That is the start point that is so difficult to achieve with no resources and few people willing to volunteer their time. If the issue is one of the David and Goliath—which is what it feels like most of the time for the management committee and the chairman of the committee—we should give a few stones for David to hurl at Goliath with his catapult. That would make an enormous difference. If we achieve anything as a result of this debate it should be in that direction.