After listening to nonsense from some ministers and MPs in the debate on Monday on the Leasehold and Freehold Reform Bill that leasehold abuses are confined to “bad landlords”, Ruth Cadbury made the correct point that they are systemic and professionals train up to perfect them.
In one of strongest speeches of the night, the Labour MP for Brentford and Isleworth, dismissed any notion that failings in leasehold were the result of “rogue operators”, as had been argued in its briefing to MPs by the landlord lobbyist, The Property Institute / Association of Residential Managing Agents (ARMA).
Ms Cadbury dismissed any notion that “the rip-off merchants constitute only a certain proportion of freeholders”.
“People have been working in cahoots over the past 10 years: attending conferences; identifying the weaknesses in the law; sharing information and forming links with professionals such as agents and solicitors in order to rip off innocent leaseholders.
“This is a consistent, organised scam that has been growing over 10 years, which is why there are so many more problems now than there were, say, 15 or 20 years ago.”
Ms Cadbury praised the work of LKP:
“For years and years, leaseholders, campaigners and groups such as the Leasehold Knowledge Partnership have been warning the Government about the huge harm being done by our outdated, feudal and antique leasehold system …
“Problems with leaseholds is one of the biggest issues brought to me by constituents, and I am sure if the Minister joined me in meeting residents of just one or two blocks in my constituency, whether it was Great West Quarter in Brentford, Grove House in Isleworth or Wheatstone House in Chiswick, he would see the wide array of problems caused by the leasehold system.”
Ms Cadbury was the only MP to highlight the complicit role of professionals, whose incomes come from the failings of the leasehold system.
She referred to buyers “too often kept in the dark by solicitors, who are often recommended by developers”, who were promised services such as concierges or gyms that fail to materialise; or failings with the services that are provided and then find that their service charges have “increased to more than £7,000 a year, over 50% more than what they were told they would be spending”.
She added: “One constituent has seen a trebling of their service charge since they bought their flat in 2017, but while the service charge goes up, the services get worse.
“Leaseholders feel that they are treated like cash cows.”
“If they were lured into shared ownership, managed by housing associations, they face additional problems.
“The part-buy/part-rent set-up is supposed to be targeted at keyworkers in the public sector, many of whom are on fixed pay. On top of the mortgage and service charges, those so-called owners — they are not really owners, are they? — find out that their rent is going up.
“In many cases, my constituents in shared ownership have seen rent increases of 6%, 7% or 8%. They only own 20% or 25%, and if they need to sell, they have to sell through their housing association …
“Many housing associations drag their feet on resales as there is not much money to make from them. They focus their energy on getting the new blocks sold.
“I have heard from many constituents who are shared owners. They wait months and months to sell, and have to pay for costly valuations, while they are trapped in limbo trying to get on with their lives.”
Ms Cadbury referenced Wheatstone House in Chiswick, which is managed by L and Q, but leaves the residents with no hot water or heating, and Peabody-Catalyst at Aplin Way in Isleworth that delayed fixing a lift.
She despaired of the same companies – the giants FirstPort and Rendall and Rittner – “hoovering up the management contracts for a range of block .. all the while providing an appalling service to the leaseholders”.
Ms Cadbury ended her speech with an appeal on behalf of first-time buyers:
“When someone is handed their first set of keys, it should be a day of dreams, but for so many of my constituents and millions of people across the country, that dream has turned into a nightmare. The Government had a chance to end that nightmare through this piece of legislation, but they have failed to do so.”
https://www.parliamentlive.tv/Event/Index/049c012d-0c14-4997-bfcb-c4c1a1c1ac69
Give leaseholders right of first refusal whenever a freehold is sold, says Helen Morgan MP
Helen Morgan, the LibDem MP who replaced disgraced Tory MP-for-hire Owen Paterson in North Shropshire, pointed out that Liberals had been arguing against leasehold since the days of Lloyd George.
She was also the only MP to state that she had been lobbied by the sector to oppose reform.
She argued that “commonhold should be the default tenure for all flats, and that it should be easier for leaseholders to collectively purchase their freehold should they wish. I also agree with several other Members that giving leaseholders first refusal when the freehold is sold is a good idea. It seems to me that without those more radical measures, the Bill is less leasehold reform and more leasehold tinkering.”
Related posts:
Ground rent scam ‘creates new asset class,’ says Ruth Cadbury
MPs fail to stop Robert Jenrick’s multi-billion pound planning hand-out to offshore freeholders
Communities Select Committee reject the lobbying nonsense of the freeholders’ good behaviour ‘pledge’
Reviewer of building regulations admits post-Grenfell safety regime open to abuse by rogue freeholders
Shared ownership: a misnomer that can be worse than renting and worse than leasehold, says solicitor
Lee Rowley and Matthew Pennycook duel political points over leasehold reform Bill
An excellent speech indeed, which raises the question as to why in the last 25 years there has been only one case of enforcement/prosecution for breach of Section 21 and/or Section 22 of Landlord and Tenant Act 1985 by a Local Authority.