Freehold Estate Fees

Mary Glindon Excerpts

Tuesday 22nd January 2019 Westminster Hall

[Helen Goodman]

My hon. Friend makes a very good point. We need more transparency and greater accountability, and I will come on to how we might secure those things. One of the things that homeowners have noted is their frustration that they do not have any control over who the managing agent is. The relationship between the big builders and their favourite management companies and the processes for acquiring these communal spaces are shrouded in mystery. The fees appear to be plucked from thin air. In some cases, a vague “administration” category accounts for up to 70% of the total bill.

What do homeowners get in exchange for their fee? Of the 200 people who completed my survey, only one indicated a very good standard of maintenance. That was perhaps an optimistic assessment. The person went on to explain that

“the grass is cut regularly, but…we were promised a play park and village green with a pond. None have materialised.”

Others complained of dead or dying trees, poorly maintained shrubberies, wastelands, fly-tipping, broken or absent street lighting, playgrounds awaiting repair and a general absence of the management company, aside from requests for payment. Specific complaints included how Greenbelt was using a strimmer within a dedicated nature park set up to protect newts; in another case, a community hedgerow project was destroyed.

Homeowners in freehold properties currently have no way to challenge unfair fees or poor service; the power is almost entirely in the hands of the management company. My constituents have faced threats to block the on-sale of their properties, and they have been threatened with bailiffs and court action if they do not adhere to the demands of the management company.

[Mary Glindon (North Tyneside) (Lab)]

I congratulate my hon. Friend, as everyone else has, on securing this really important debate. Something that really frightened me about the case of one of my constituents was that she did not realise that if she defaults on her rent charge, the rent charge owner can repossess her property and enjoy the same rights as if she had never had the transfer of the freehold in the first place. I am sure my hon. Friend will agree that that is petrifying.

[Helen Goodman]

What my hon. Friend says is absolutely right. That is a misuse of the Law of Property Act 1925. That is why we are looking to the Government to make some legal changes. This is not just bad behaviour; this is clearly a deliberate strategy and the company has obviously taken very expensive legal advice in order to develop that strategy. To stop them, we will need some legal change.

I heard from somebody who lives in the west midlands—I do not know whether it was a constituent of my hon. Friend the Member for West Bromwich West (Mr Bailey)—who said that he had had a 17-year battle with Greenbelt and that he was charged legal fees of £25,000. Obviously, the ordinary homeowner cannot afford to shell out on legal fees like that.

Despite their name, property management companies appear to have no interest in actively managing the land they acquire. On the website of London and Economic Properties Ltd, a Wiltshire-based firm that manages the Middridge Vale development in Shildon in my constituency, property is listed under its “investments” section. The company boasts of its

“enviable track record, investing across the property spectrum to deliver profits for shareholders.”

There is no mention of homeowners. It says of the land at Shildon that it

“benefits from grant income from the Forestry Commission as well as a housing levy from the adjacent housing development which…will provide an annual payment in perpetuity of £100 from each of the 278 houses”.

There is no mention of the company’s obligations as the caretaker for the site. Ultimately, that is the problem: these extortionate fees and poor service are the result of a culture that sees housing as an abstract investment, rather than the foundations of our families and communities.

This is a massive scam. The House of Commons Library gave me figures that suggest that perhaps half a million people have been affected by this problem in the last 10 years. That means that somebody or some people are coining in about £100 million a year.

What change is needed? The Government have outlined their commitment to reform the process for those buying a new build home to obtain redress. They intend to bring forward legislation to require all developers to belong to a new homes ombudsman. They have also said that they hope to offer freeholders the same rights as leaseholders to challenge the reasonableness of charges at a property tribunal. Can the Minister say when that will be done? When will he bring forward these measures?

Legislation to improve access to dispute resolution is helpful, but it does not tackle the root problem. The Freehold Properties (Management Charges and Shared Facilities) Bill, which I introduced in November, recommended three changes for homeowners who are already caught in this trap. First, it would cap and regulate estate maintenance fees, to give homeowners financial stability and allow them to buy and sell their homes knowing that costs cannot increase indefinitely. Secondly, it would introduce measures to ensure that shared spaces are maintained to a proper standard, perhaps through something similar to the new homes ombudsman. Thirdly, it would contain provisions for residents if they chose to opt out of their management company and to self-manage, if that was what they wanted to do.

For estates yet to be built, the planning regulations need to be tightened, to require them to be built to an adoptable standard. Local authorities are currently often willing to adopt spaces in exchange for an agreed sum from the developer to cover upkeep for a fixed period. For example, Durham County Council asked for 15 years’ worth. That is a reasonable ask of an industry that can afford to pay its chief executive officer bonuses of £75 million.

Many of these estates were built with support from the Government’s Help to Buy scheme, financed by taxpayers. I would like the Minister to tell us this afternoon that the Government are going to stop providing support to any development using that model. Will the Minister also refer the mis-selling aspect of this to the Financial Conduct Authority to investigate, and to the Law Society, to strike off lawyers who have worked unethically in the interests of property dealers while taking fees and purporting to work for homebuyers?

A situation has arisen whereby the private estates model is rapidly becoming the norm for new developments, with those who have saved hard for their homes bearing an unfair burden and builders treating them as a cash cow. Homeowners do not want sympathy and understanding. They want action, and they would like to see action now. I hope the Minister will be able to make a clear, timetabled commitment this afternoon. I am looking forward to hearing his response.

Housing Bodies: Accountability

Mary Glindon Excerpts

Tuesday 20th November 2018 Westminster Hall

[Mr Cunningham]

That is why I mentioned the Philmont estate in the constituency of my hon. Friend the Member for Coventry North West. There, there has been bad workmanship—to say the least—and a bad build. Residents have been moved out of their houses for a period of about 40 weeks and cannot get any compensation. They have to rent privately to get accommodation; who is going to compensate them? My hon. Friend the Member for Feltham and Heston (Seema Malhotra) has highlighted similar problems to those we have in Coventry. The builders, Persimmon, have particularly let down residents by refusing to take any responsibility or pay compensation.

Of course, there are sometimes unforeseen issues with the quality of the design and building of a house. However, there seem to be widespread problems with new builds due to rushed building and substandard resources. I also hear from an increasing number of constituents about delays in moving into their new-build houses. I have one constituent who has had a seven-month delay in the building of her new home this year, which has made her and her children homeless: they are having to get by in a friend’s spare room. I am certain that that is the case across the country, as my hon. Friend touched on. I am also sure that there are many more people out there who are affected by delays, but who never contact us because they do not think they will get anywhere.

I would like the Government to review the checks that are currently in place regarding the design and build of houses. They should also look at the support offered to customers by housing organisations when issues arise. We must make sure that mistakes and errors are found early in the process, and that delays are lessened as much as possible.

[Mary Glindon (North Tyneside) (Lab)]

Can we please note that the things that are wrong with these houses are not simply minor issues? I spoke to a woman on Saturday whose staircase had twice collapsed. Another constituent had the roof of their new home collapse. These problems are really serious; they are not just little things that need to be put right after someone has moved in.

[Mr Cunningham]

I fully agree with my hon. Friend. Given local government cuts, trading standards officers cannot police this sector any more—it is as simple as that. That is one reason why these housing organisations are getting away with it, but the law should be tightened up as well.

Budget Resolutions

Mary Glindon Excerpts

1st reading: House of Commons
Thursday 1st November 2018 Commons Chamber

[Mary Glindon (North Tyneside) (Lab)]

I speak as co-chair of the cross-party drugs, alcohol and justice group, and as a member of the all-party group on alcohol harm. With dozens of alcohol-related deaths across the UK every day, those two groups decided that, rather than wait ages for the Government’s alcohol strategy, we would launch our own alcohol charter that advocates achievable steps to improve support for those in need, protect public health, and cut crime and disorder. It has the support of 30 relevant organisations, and I urge hon. Members to add their support by signing early-day motion 1682.

Despite the Chancellor’s claims of record funding for the NHS, I was disappointed that he failed to take the opportunity in the Budget to reduce alcohol harm. Instead, it seemed that he had been wooed by pre-Budget pleas for him to cut beer duty, such as the claims plastered on Westminster tube station that such a measure would protect our pubs. Cuts in duty do not benefit pubs because supermarkets continue to undercut pub prices, and big brewers retain the savings. We do not protect people or pubs by allowing supermarkets to sell alcohol more cheaply than water for vulnerable people to drink at home alone or on our streets.

Colin Shevills of Balance North East highlighted the fact that cheap alcohol places a huge burden on our communities, the NHS and our public services in our north-east. He also referred to the findings in a survey by north-east pub landlords, which found that cheap supermarket alcohol, rather than alcohol taxes, is the main reason to blame for the closure of our local pubs. It is particularly alarming that in the past five years cuts to alcohol duty have cost the Treasury about £4 billion. The Government estimate that the cost will rise to £8 billion during the next five years. That money could fund 34 million emergency ambulance call-outs or over half a million social care packages. Furthermore, figures show that, if the level of alcohol consumption remains unchallenged, it is set to cost the NHS £17 billion in the next five years.

From pub landlords to health organisations, there is strong agreement that we need a minimum unit price to help to combat the sale of cheap alcohol in shops and the impact that has on our communities. The Chancellor needs to listen to those groups and cross-party advice, and rethink his strategy on alcohol to support our great local pubs and to prioritise alcohol harm reduction.

Draft Newcastle Upon Tyne, North Tyneside and Northumberland Combined Authority (Establishment and Functions) Order 2018

Mary Glindon Excerpts

Monday 22nd October 2018 General Committees

[Mary Glindon (North Tyneside) (Lab)]

It is an honour to speak under your chairmanship, Sir David. Notwithstanding what my hon. Friend the Member for Oldham West and Royton has said—he got all the hard-hitting bits out of the way—I want to declare my support for the devolution deal for North of Tyne and the creation of the new combined authority. I thank Newcastle, North Tyneside and Northumberland authorities for their hard work alongside Government to get us to this point.

Great things are happening in my constituency of North Tyneside. Our businesses and many people are doing well, but for some of my constituents life is much more of a daily struggle. This deal, with its focus on inclusive growth and an inclusive economy, is important to me, especially because local control and significant extra funding will give people in North Tyneside access to more and better jobs. They will be able to get the skills that they need to get into work. Even people who have had caring responsibilities for years will be able to get back into work after being without it for such a long time. It will help my constituents in poor-quality housing and poor-quality work to access the opportunities they need to give them a better chance in life.

I am pleased to say that businesses across North Tyneside—from those at the brilliant Quorum business park, to the world-class engineering companies along the north bank of the Tyne—are excited about the deal. As it grows and develops, and more powers are delegated from Westminster and Whitehall to the new authority, I look forward to these powers expanding into wider areas, such as the cultural economy. That sector is very important to me, given that I have a world heritage site in my constituency, at Segedunum in Wallsend, which I urge everyone to visit.

The deal can only make our already great area north of the Tyne an even better place to live and work, and, most importantly, it will create expanded opportunities for individuals and businesses—opportunities that currently do not exist. I sincerely hope that the Committee will agree to progress the order.