Leasehold Reform

Debate between Alex Chalk and Matthew Offord

Thursday 11th July 2019 Commons Chamber

[Dr Matthew Offord (Hendon) (Con)]

The Ministry of Housing, Communities and Local Government estimates that there are 4 million leasehold homes in England, of which 70% are flats. Because almost all flats are leasehold, leasehold transactions are more common in London. In my constituency, in the Colindale ward, there are almost 10,000 new properties—predominantly flats—on 10 hectares of land. That figure does not include the additional developments in Millbrook Park in Mill Hill, Stonegrove in Edgware and the additional properties proposed by the Mayor of London.

When I owned a flat in the Hendon area, there would always be a problem with the service charge. I had a neighbour, Les Miller, who would always challenge the service charge and speak to the managing agents, and he would always resolve the problems. Not everyone is fortunate enough to have someone like Les, but he was the perfect candidate because he was retired and could devote his time to that. However, some residents’ groups have appeared in places like Colindale. At the Colindale Village residents association at the Pulse in Colindale, Joey Sky acts on behalf of many people who have problems—especially parking problems—on the estate. That situation has arisen because there are three different managing agents for the same development, and there are just 48 parking spaces for 1,000 tenants of the properties. With the introduction of a controlled parking zone in Colindale, residents are going through hell as they simply cannot park on or off the street.

Up the road, at the development in Beaufort Park, residents are paying around £800 to park their cars. For that, they do not receive a designated parking space but are simply allowed to park in a vacant space in a parking zone. The Beaufort Park residents association is not recognised by the developers, who say that they will recognise any such group only if a percentage of the owner-occupiers come together and form it. Unfortunately, because there are so many overseas investors in the development, the residents’ concerns are ignored. That is a great mistake, as these are very sensible people who are seeking solutions to the problems that many experience.

Other parts of my constituency are having problems with leaseholds. The residents of the Edgware Green development in Edgware have been trying to buy the freehold of their properties from Barrett Evolution. The issue is complicated by the discovery that some freeholds have already been sold on to another company. Many residents were not aware of this and were not given the opportunity to purchase. The new freeholder has increased the annual ground rent by almost 32%, and the residents have had to engage a solicitor collectively to assist with their purchase, as the matter is really not very straightforward.

[Alex Chalk (Cheltenham) (Con)]

There is a similar situation in Cheltenham where a freehold has been passed on. The freeholder then completely goes to ground, so when my constituents try to make contact with the company, they cannot get hold of it and are unable to sell their properties. It is an appalling situation. Does my hon. Friend not agree?

[Dr Offord]

I certainly do agree. It is such a frustrating scenario when it is not even possible to find out who is responsible. I think that the managing agents in that scenario will be particularly keen on sending their bills to my hon. Friend’s constituents and will not be very slow in forwarding those invoices.

Three years ago, residents at Kennyland Court in Hendon were asked by their managing agents to pay for roof repairs despite a 20-year guarantee being in place since 2003. The managing agents said in their defence that the guarantee was for 15 years and was on a reduced basis, but even my maths shows me that 2016, when the bills were issued, was still two years before the end of the guarantee. However, residents were just given two repair options and no real response to the matter of the guarantee. They felt that they were being bullied by the managing agents into accepting the repair bill without any answers to their legitimate questions.

A constituent at the Brinsdale Park development in Hendon is having difficulty with a managing agent over vague bills and a lack of invoices. She says that the managing agent has consistently sent coercive demands for what she believes to be incorrect service charges. She has now invoked sections 21 and 22 of the Landlord and Tenant Act 1985. Section 21 relates to service charge information and section 22 relates to a request to inspect supporting accounts. This all seems very reasonable: someone receives an invoice, invokes sections 21 and 22, and sees the information. However, the managing agent has responded by sending emails accusing my constituent of harassing him in seeking such information.

It appears, judging from this debate, that there is widespread dissatisfaction about the way that many of our constituents are being treated. Indeed, that dissatisfaction has been expressed by leaseholders themselves regarding service charges. Of 1,244 leaseholders surveyed by the Leasehold Advisory Service in 2016, 40% strongly disagreed that service charges represented value for money and 62% agreed that the services provided had not improved in the past two years.

The problems are quite simple. There is difficulty buying freeholds. There is a lack of transparency around the additional medium-term and long-term cost of a leasehold compared with buying a freehold. There are significant legal and surveying costs when leaseholders want to purchase part of the freehold, or, indeed, part of the land itself. There is an excessive increase in ground rents, a lack of transparency around service charges and freeholds not being offered to leaseholders before being sold off to a third party. This situation really is intolerable for so many people, particularly in my own constituency. I understand that the Government have sought a consultation. I hope that they act on it, because the way that residents are being treated is not only unfair but, in many ways, morally corrupt, and we must act sooner rather than later.