LKP is seeing a surge in council major works bills, particularly in London, coming through on the leaseholders’ Help Forms. These are wipe-out bills that will in many cases drive stuggling first-time buyers back into the rental market.
It was to avoid precisely this that the Coalition government under housing secretary Eric Pickles introduced Florrie’s Law in 2014, to cap council major works bills at £15,000 in London and £10,000 outside the capital.
But to LKP’s knowledge, the cap has never once been applied because it comes into force only when central government funds are deployed, and these housing grants have stopped.
As a result, private leaseholders are on the hook for the whole amount.
Florrie’s Bill was named after Florence Bourne, 93, whose death was hastened by the stress of a £50,00 bill from Newham council for a new roof, which a professional witness successfully argued was unnecessary.
The latest spate of major works bills have aroused the interest of BBC London TV and radio, which have reported the plight of council leaseholders facing bills up to £44,000 to £98,000 on the Taverner and Peckett Square estates.
Leaseholders living in former council homes are facing refurbishment bills of thousands of pounds, despite a legal cap introduced nine years ago. Campaigners told the BBC that they were facing bills of up to £65,000, for works they say are not needed.
The Guardian and The Observer have reported the issue here.
ike many people, teacher Neil Hosken is being careful with money as the cost of living crisis pushes up his food and energy bills, and his low-cost mortgage deal comes to an end. So he was shocked to receive a letter from the council warning of a bill of up to £44,000 for repairs to his home.
What is unclear is why there is a sudden surge in major works bills, ranging from £15,000 to £65,000 that we have seen so far this week (it’s Wednesday).
Wandsworth (bill unknown at this stage)
Islington £44,000 (or £98,000)
The councils may simply be responding to a backlog of major works delayed by the pandemic, or they are spooked by the death of two-year-old Awaab Ishak in Rochdale owing to mould contamination.
We can debate whether it was ever a good idea to allow right to buy in apartment blocks of social housing – which have no reserve funds so the private leaseholders face a huge bill all at once.
We can debate whether right to buy has been much of a success in London, where 40 per cent of private leasehold in council housing now belongs to investors, some of whom are based offshore.
We can debate whether these resources would not be better deployed increasing social housing, of which there is a desperate shortage.
It also needs acknowledging that council blocks do need major works and those owning private assets in them do need to share the responsibilities of home ownership as well as enjoy the gains.
On the other hand, local authorities do need to up their game and get passably decent value for money, and not simply accept the often bogus works schedules that maintenance companies seek to profit from.
These maintenance companies are employed on controversial “long-term qualifying agreements”, which means works don’t go out to tender and leaseholders must take the word of those profiting from the works that the figures are honest. That’s a tall order, in the leasehold property game.
Here’s the head of council housing in Exeter who went to prison taking bribes from one of these outfits:
Wingrave’s partner Lyn McMayon, 59, of the same address, admitted two counts of converting criminal property; Harold McGirl, of Southbourne Road, St Austell, Cornwall, pleaded guilty to one charge of committing misconduct in public office and Gary Rawlings, 59, of mill Meadow, Biggleswade, admitted fraud.
On the other hand, the Conservatives are the party of home ownership. It has splurged billions to get people on to the property ladder through Help To Buy subsidised loans.
Housebuilders have resorted to ever more complex – sadly, sometimes downright cheating – shared ownership arrangements in order to do the same. This leases are going to be a long-term problem.
In spite of these efforts, and expense, home ownership in the UK is falling, down from 64.3 per cent in 2011 to 62.5 per cent today.
Amid the many reams of census data released this week, one figure stands out above all else as a cause for alarm. Home ownership in England and Wales has fallen to its lowest level in four decades. Some 62.5 per cent of homes in this country are now occupied by their owners, down from 64.3 per cent in 2011.
This is a disastrous situation, and we are very likely to see how this generational unfairness in the property market plays out in the years ahead.
The core point is that the Conservatives introduced right to buy and have passed an utterly useless law to cap major works costs that does not work.
It could be made to work – excluding investors; varying leases to owner occupation only with no or limited letting – and may well prove cheaper than the alternatives.
Doing nothing means a lot of homeowners, primarily young ones, will lose their homes.