Residential Estate Management Companies Debate
Full Debate: Read Full DebateDepartment: Ministry of Housing, Communities and Local Government
Manuela Perteghella
Main Page: Manuela Perteghella (Liberal Democrat - Stratford-on-Avon)Department Debates - View all Manuela Perteghella's debates with the Ministry of Housing, Communities and Local Government
Residential Estate Management Companies
Manuela Perteghella Excerpts(1 week, 6 days ago)
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Manuela Perteghella (Stratford-on-Avon) (LD)
It is a pleasure to speak under your chairmanship, Mr Stuart. I commend my hon. Friend the Member for South Devon (Caroline Voaden) for leading this important debate.
For far too long, management companies have operated in a vacuum of regulation, and communities are paying the price. Residents find themselves locked into contracts with no flexibility in payment, and often no cap on the service charges imposed. There is also a lack of transparency, without proper itemised charges being made available to residents, and a lack of communication and engagement with residents about how the companies are adhering to agreed management plans.
This is not just unfair but a recipe for disaster, and it is contributing to yet another housing crisis. Residents in social housing—many housed by the local authority—are not able to keep up with hikes on service charges. Homeowners who want to sell their homes are finding it difficult to do so because of uncapped service charges. These companies are unaccountable, and there is no regulation to stop charges being raised unreasonably, or a service being withdrawn without explanation.
Often the service that residents receive is below standard or non-existent. One of my constituents now pays more to FirstPort in service charges than on her own mortgage. FirstPort takes a 5% fee for major works such as roofing, redecorating and carpeting communal areas, which is abhorrent. If we need to have maintenance companies, then residents should be able to shop around for better deals, and the right to manage should be an easy process for both leaseholders and freeholders.
Furthermore, we see major issues with sustainable urban drainage systems and unadopted roads—infrastructure that is often left unfinished or below standard when developers walk away with no clarity on who is responsible. In some cases, we have even seen roads constructed below adoptable standards, or taking many years to be adopted. Residents are paying service charges, on top of their council tax, for drainage and roads that will never be adopted.
The Competition and Markets Authority recommended that those problems be addressed, but to date that recommendation has not been implemented. Will the Government commit to implementing the CMA’s proposals? I also urge them to consider retrospective powers for councils to intervene where such arrangements are clearly exploitative and unsustainable. At present, local authorities have no power to undo agreements that are already in place.
This issue requires national leadership and statutory oversight. The Government must regulate estate management companies and ensure that residents are not left powerless or trapped in the place they call home.