Last week, I was proud to stand up for rip-off Leasehold victims in our constituency during a debate in the House of Commons. Many of you will know I have repeatedly raised the issue of unfair leasehold charges in Parliament and helped found the All Party Parliamentary Group For Leasehold Reform to look into this murky boom industry properly. It is a scandal that is at epidemic levels in our area. 16 of the 20 most affected constituencies are in the North West and 14 of those are in Greater Manchester.
I’m not prone to hyperbole but some of the cases we’ve seen can only be described as legalised extortion. There is simply no relationship between the services that are being rendered and the costs that are being charged to consumers.
I am bombarded with emails from constituents who have been affected by the problems of ground rents and service charges. I could have used up the whole of my allocated time in the Chamber last week relaying some of the horror stories I have been told about. A block of 18 flats in Hattersley were quoted £32,000 to paint their hallways by their management group. You could have painted them with gold and expected a lower quote. Another constituent was charged £180 just to ask what it would cost to buy their freehold – £180 just for a quote. Often the bill for service charges comes with no information or breakdown, sometimes even charging for works that pre-dated that particular managing agent taking over.
I will continue to speak up for my constituents until something gets done. In my speech, I detailed five things that I would like to see happen.
- The sale of leaseholds has to end. That should be absolutely obvious. I am chuffed that this has become Labour policy with us recently announcing that we would end the sale of new leasehold homes by the end of our first term in Government.
- Ground rents should be capped at a percentage of the property value. Again, this is now Labour policy with a pledge that, when in Government, we would introduce a fair cap on ground rent for existing leaseholders – 0.1% of the property value, up to a maximum of £250 a year.
- There needs to be a simple right-to-buy formula for people wishing to buy their freehold, one which is not bureaucratic and without any additional administrative or legal costs. Rather, it should be something that can be used in every case in order to let people buy that freehold fairly.
- Without doubt, there should be a crackdown on unfair terms and opaque costs in service charges.
- Ultimately, we need to make it as simple as possible to let residents take over. There are some reputable people in the industry and some people will not need this. However, the power to make decisions needs to be returned to the residents.
There are many precedents of where Governments have legislated to limit unfair terms and conditions because the power balance between both parties is not right. I cannot stress enough how much this applies to this situation. It is symptomatic of how our housing market just does not work anywhere near how it should. I don’t think the design of new homes works particularly well, I don’t think the power of developers is right in our system, I don’t think the affordability of homes is anywhere near correct and I don’t think this leasehold system is fit for purpose at all. Some of these things can be influenced at a local level and we are trying to do that here in Stalybridge and Hyde. But some things require parliamentary legislative action and this is an area that is screaming out for such change. Surely everyone in Parliament can agree in that so I urge the Government to get on with it.