When you enter parliament, there are some issues you know will be universally felt, then there are others that are more niche and local. When I began contacting colleagues about some casework I’d been receiving about residential estate management companies, I thought this issue would fall into the latter category; it turned out I was wrong.
It transpired that MPs across the country and across different parties were, like me, finding their inboxes crowded with complaints about the shocking, predatory practices of these companies.
Last month, I led a Westminster Hall on this issue, where my colleagues and I could put those complaints on the record and call on the Housing Minister to act.
I opened the debate by noting that housing reform has long been a Liberal Democrat goal. In fact, it has been a campaign of ours since Lloyd George introduced the people’s budget in 1909. And, as I said last week, we will keep going until we see change!
This prompted a small ripple of laughter among my colleagues, but as I went on it became clear that there’s nothing funny about the behaviour of residential estate management companies.
Tales of intimidation, excessive charges, and poor services span the length and breadth of our country, and without government action, I fear we’re facing the next great scandal of our times.
That might sound like rhetoric, but if you read the stories of residents, you’ll find it hard to disagree.
Take Camomile Lawn, a housing development in my constituency of South Devon: residents there were told that the annual contribution to a reserve fund had been increased from £2,000 to £8,000 a year – a 265% rise!
Service charges also went up by 23% based on a 10-year plan that wasn’t shared with residents. While accounting costs rose by 55%, again with no explanation.
Such a shocking increase in costs might remind you of the recent actions of water firms; many of whom inflicted new bills on customers that were way above the average recommended by Ofwat.
Unfortunately, the similarities don’t end there. Much like rogue water firms like South West Water, these residential estate management companies are focused solely on their profits and ignore their responsibilities to their customers.
They are often owned by a shadowy collection of overseas investors and eat up smaller players in the UK market so they can build up their wealth and size, and ride roughshod over anyone who questions their methods or asks where their money has gone.
Both Labour and the Conservatives are clearly aware of this growing issue. Shortly after the Liberal Democrats invited the CEO of FirstPort, one of the country’s largest management companies, to Westminster, they did the same.
I imagine he feels very popular in receiving so many invites to parliament. But I think it’s a grim reflection of the number of people who are coming to their MPs having exhausted all other avenues to raise complaints with FirstPort.
His company manages over 310,000 homes across England, Wales, and Scotland – so, roughly, we’re looking at around half a million people dealing with just this one company alone.
You’d hope therefore they would take the complaints we raised on behalf of our constituents seriously; unfortunately, not.
It’s extremely disappointing that since our meeting – at which great things were promised – the only response we’ve received from the South West regional operations director for the company has been one automatic email reply. It’s just not good enough.
It is way past time that management companies were required to act responsibly and treat their residents with respect. Fortunately, this appears to be the government’s view too.
I was pleased with the Housing Minister’s response during my debate, where he noted that the government intends to act decisively in cutting the prevalence of private management arrangements.
What shape this will take remains to be seen. But among my calls for the government was increased regulation of estate management companies and the introduction of legislation to allow residents to challenge excessive service fees.
As the Minister correctly said, this is a very complicated issue, and any action could have far-reaching consequences, so a considered approach is needed if we are to reform a housing industry that has been failing consumers for so long.
Excessive charges and poor services – why I’m calling for urgent action against the UK’s estate management companies
