My bill will put an end to fleecehold misery
3 min read
Now is the time to ensure that homeowners are no longer at the mercy of unaccountable private companies.
Over coffee with a family friend last weekend, they shared how a missed payment to their estate management company for an unknown charge led to a penalty from their mortgage lender, tanking their credit score. They owned their home as a freeholder, not a leaseholder, but this wasn’t enough to protect them. They’d been hit by the growing issue of fleecehold housing estates.
Historically, new estates were readily adopted by local authorities, who took on management of the public space and roads on the estate just like any other in their area. A failure of housing regulation to keep pace and recent pressures on local authority finances means this norm is no more. Across the country, a staggering 80 per cent of new housing estates can go without adoption by local authorities. In the absence of this, new homeowners, despite owning the freehold of their home, are trapped in contractual relationships with often unaccountable management companies – a growing scandal, commonly known as fleecehold.
Those stuck on unadopted estates are hit with the fleecehold stealth tax, forced to pay twice for services others receive through their council tax. The Competition and Markets Authority’s own, very conservative, estimates found that in 2022 alone, households shelled out an eyewatering £260m in estate management charges. While the average one-off charge for works hovers around £350, many residents pay significantly more for significant unplanned repairs. Worse still, given the limited size of many estates, the bulk of these payments often go toward professional fees, rather than the services benefiting the estate.
For those trying to leave the system, complicated legal arrangements can cause sales to fall through, and exploitative rent charges can hit unsuspecting homeowners' credit scores. This scandal is a ticking time bomb for homebuyers who often don’t realise they are signing up for potentially lifelong private fees with little oversight or chance of escape.
Britain has long valued home ownership, and our Labour government has rightly set ambitious goals to enable more families across the country to access the security and agency it can deliver. However, fleecehold arrangements are a far cry from this ideal. Without action, our commitment to building 1.5m homes risks undercutting the very principles it aims to deliver.
That’s why it’s important the government works quickly to tackle fleecehold, once and for all. Today I’m introducing a bill setting out how we can put an end to this misery. My Housing Estate Bill shines a light on the fleecehold scandal, advocating for the right of freeholders on unadopted private or mixed-use estates to take control of managing their communal spaces. The bill also pushes for minimum standards for public amenities on new estates and clear timelines for adoption by local authorities, cutting out unadopted estates at source.
It’s a push to ensure that homeowners are no longer at the mercy of unaccountable private companies and that communities receive the quality services they deserve.
It’s time to call time on the fleecehold stealth tax. I’ll be working with the government to make sure we do just that.
Alistair Strathern is the Labour MP for Hitchin.
PoliticsHome Newsletters
Get the inside track on what MPs and Peers are talking about. Sign up to The House's morning email for the latest insight and reaction from Parliamentarians, policy-makers and organisations.
