We want action now against the rotten leasehold system
A group of Labour MPs is campaigning for reform of the leasehold system (Alamy)
4 min read
When Susan* bought a flat in Colindale, North London, it was the realisation of a lifelong dream to own a place of her own. But that dream quickly turned into a nightmare.
As well as having to pay her mortgage, Susan also had to pay a monthly service charge to a facilities management company - called a ‘managing agent’ - to cover the upkeep of the building her flat was in. At first, the charge was affordable. But in the years that followed, the charge doubled. Then it almost doubled again. Soon she was paying over £400 a month, effectively adding another mortgage payment to her annual outgoings.
Susan had little choice but to pay, even though the managing agent had done little to explain why the charges were so high - and in some cases, had made mistakes in calculating her bill. If she failed to pay, she could forfeit her flat.
What’s more, even as Susan was being forced to pay more and more, she was getting less and less. The building was in a state of disrepair and the managing agent was slow to conduct repairs.
With a heavy heart, Susan decided she would have to sell. But with such high service charges, she found it difficult to find a buyer. She felt trapped, exploited as a cash cow by her building’s managing agent.
Susan’s story is heartbreaking, but far from unique. Millions of leaseholders across England are facing a similar nightmare: rip-off service charges, inadequate service, a lack of transparency and a complete lack of accountability from these exploitative companies.
Since becoming Members of Parliament in July, we have heard stories like Susan’s from our constituents time and time again. And we are not alone. Dozens of our colleagues from right across the country have heard similar tales of rip off service charges and unaccountable managing agents. Enough is enough. We are determined to stand up for our constituents and do all we can to end the service charge rip off and call managing agents to book.
Leaseholders deserve a fair deal and to be treated with respect
That is why we and over 90 of our Labour colleagues in Parliament formed Labour for Leaseholders, a group to hold managing agents to account. And that’s why dozens of us wrote to the managing director of FirstPort, the UK’s largest managing agent, to demand he come to Parliament to explain their conduct.
We and many colleagues took the opportunity to put our residents’ concerns directly to FirstPort and demand change. They acknowledged the problems we set out, and made a series of pledges to improve. But warm words and promises are not enough – we expect action. We will meet FirstPort again to ensure tangible progress is made, and our group is considering which other failing managing agents to focus on next. There are plenty to choose from.
After sharing details from our meeting with FirstPort with constituents, a few came back with the same challenge. Doesn’t this problem go deeper than managing agents? The entire leasehold system is outdated, feudal, rotten. Don’t you agree the problem needs tackling head on?
Our answer, in short, is yes. This government is committed to taking action to end the broken leasehold system once and for all. Labour for Leaseholders will do everything we can to support them. But there is much we can be doing to complement that work by holding managing agents to account now.
The long-term answer is to pass legislation to bring this outdated, feudal system to an end, and we wholeheartedly support the government’s bold vision. Housing Minister Matt Pennycook has been very clear that as we transition to a commonhold future, government will need to strengthen the regulation of managing agents to improve standards of service. But alongside that, we want to take action to help leaseholders now.
Leaseholders deserve a fair deal and to be treated with respect. They deserve to have managing agents who are responsive, professional, and who have their best interests at heart. Both through our support for the government’s bold vision and through our action to force accountability on managing agents, that is what we’ll fight hard to deliver. Watch this space.
*The names of constituents mentioned within this story have been changed
Labour MPs David Pinto-Duschinsky and Rachel Blake are co-chairing the Labour for Leaseholders group
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