Residential Estate Management Companies

Jim Shannon Excerpts

Tuesday 22nd April 2025 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to serve under your chairship, Mr Stuart. I commend the hon. Member for South Devon (Caroline Voaden) for setting the scene so well.

I recently met one of the management companies in my local area, where residents had lodged a list of queries after their management fees went up by a substantial amount. They asked where the money had gone. It is difficult to see why fences still need painting when there is a bill for paint, and it is hard to understand why there is a bill for the upkeep of a sign that does not appear to have been cleaned in years. The difficulty with these companies is that, with no regulation of them, residents feel they are being done over.

It might be best if I quote one of my constituents and then offer a solution. My constituent said:

“I am writing as a resident to express serious concerns regarding the management of communal land. Like many homeowners across the UK, I am facing high and increasing charges for substandard maintenance, with no option to switch providers.

The company operates a monopoly in many estates, charging fees that are neither transparent nor fairly regulated. Residents are often left with poorly maintained green spaces despite paying substantial fees. Furthermore, there is no option for estates to collectively choose a different management company, leaving homeowners effectively trapped in an unfair system. I am asking for your support.”

She is asking me for my support, and I am asking the Minister to address this issue.

The solution my constituent suggests is introducing

“a cap on the fees that land management companies like Greenbelt can charge homeowners”

and creating

“a legal mechanism that allows estates to vote on who manages their communal land, giving residents the freedom to choose better service providers.”

She finishes by saying:

“Many homeowners across the UK are affected by this, and I believe it is an issue that requires government action.”

I look to the Minister to ensure that we address this issue UK-wide, and not simply in England and Wales. Residents across the United Kingdom face the same problems as residents in Strangford, and they must be addressed.

--- Later in debate ---

[Matthew Pennycook]

There are undoubtedly issues around the purchase of homes on these estates. For example, it appears to be fairly common for residential freeholders not to be notified of their future liability for charges early in the conveyancing process. We are giving due consideration to those issues as well.

On the prevalence of future arrangements, the Government intend to seek views from a wide range of interested parties, including local authorities, management companies, developers and residential freeholders themselves. Our consultation will need to consider a wide range of trade-offs, including costs to homeowners, costs to local authorities, potential impacts on housing supply and the links with the planning system. As promised, we will consult on that matter this year.

[Jim Shannon]

Hon. Members have referred to opting out—in other words, if someone is unhappy with their management company, they can opt for another one. Would the Minister consider that, and would it be considered in the discussions he has with the Northern Ireland Assembly and the pertinent Minister?

[Matthew Pennycook]

Given the time available to me, I will have a separate conversation with the hon. Gentleman outside.

Before I conclude, I want to touch on the issue of managing agents, whose performance can present significant challenges, whether they are chosen by residents or employed by developers. Managing agents perform a critical role in managing and maintaining freehold estates as well as leasehold buildings, and the Government are determined to raise standards among them and drive out abuse and poor service at the hands of unscrupulous agents. We remain fully committed to strengthening the regulation of managing agents of leasehold properties and estate managers of freehold estates. We are looking again at the report published in 2019 by the regulation of property agents working group chaired by Lord Best. At a minimum, we believe that the regulation of managing agents should include mandatory professional qualifications. That will apply whether the agent manages a building or an estate. We will consult on the detail of that matter this year and remain committed to publishing a draft leasehold and commonhold reform Bill in the second half of this year to provide for enhanced scrutiny on the part of Parliament.

I again thank the hon. Member for South Devon for securing the debate and all those who have taken part in it. The Government intend to act, and act decisively, to protect residential freeholders on freehold estates and to reduce the prevalence of these arrangements over the long term. I look forward to ongoing engagement with hon. Members on all sides of the House—I welcome the shadow Minister’s invitation to that end—through both the forthcoming formal statutory consultations and more informal engagement across the House to ensure that we reform the system to the lasting benefit of affected homeowners.