Residential Estate Management Companies

11:30:00

I beg to move, That this House has considered residential estate management companies. I thank the Backbench Business Committee for listing this debate. It is a pleasure to serve under your chairmanship, Mr Stuart. It is good to see so many MPs back straight after the Easter break, ready to get stuck into the gritty issue of residential estate management companies, whose poor business practices have affected so many of our constituents. In that spirit, I come here today to address the Minister and to call for urgency from the Government in dealing with some serious issues, and for more regulation and new legislation. The issues raised repeatedly by constituents cause not just frustration, but in some cases serious distress. They cost significant amounts of money and sometimes lead to the loss of the entire value of a property investment at the point of resale. The situation for both leaseholders and freeholders has become so bad that such estates are now commonly referred to as “fleecehold” instead of leasehold. We note that the Government’s White Paper on leasehold reform, published last month, said that their legislation will make conversion to commonhold easier, but we feel that that will not go far enough. We look forward to seeing the legislation laid before the House. The previous Secretary of State—then the Secretary of State for Levelling Up, Housing and Communities—said that he was a “man in a hurry” to liberate leaseholders from unfair practices. He clearly was not in quite enough of a hurry, so I urge haste on the current Secretary of State. The Liberal Democrats have long called for reform for the 4.8 million existing leasehold properties in England. In fact, it has been a campaign of ours since Lloyd George introduced the people’s Budget in 1909. We will keep going until we see some change. We want leasehold tenures abolished for all properties, including flats, and we want all existing leaseholds converted into either freeholds or, where appropriate, commonholds. We are disappointed that existing leaseholders are not covered by the Government’s proposals and we urge a rethink.

I congratulate the hon. Lady on securing this debate. To add to the point she is making, is she not shocked by the scale of what we are seeing across the country? Of the new homes built in 2021-22 by the 11 largest developers, 80% are subject to fleecehold.

Yes, I absolutely agree. I will come on to that a little later. To get back to the core issue of estate management companies, every type of resident—leaseholders and freeholders—is affected by rogue practices. Perversely, the situation is often more difficult for freeholders, who do not have the same statutory rights as leaseholders to take challenges to a first-tier tribunal. Where the landlord of an estate is a housing association, no one has any right to go to tribunal if that landlord fails to manage the property properly. That, too, needs to be looked at, but it falls outside the scope of today’s debate. Whichever way we look at it, residents—whether housing association tenants, private tenants, owner-occupiers or retirees, living in a house or a flat—are being ignored, dismissed, intimidated and, frankly, fleeced by management companies that are not subject to any kind of regulation. We have all seen what happened in the water industry when private operators were allowed to focus solely on the profit line, ignoring their responsibilities to the environment while keeping shareholders happy. I believe we are looking at the next great scandal of our time: companies that may be owned by a shadowy collection of overseas investors eating up the smaller players in the UK market, building up their wealth and size so that they can ride roughshod over anyone who is tenacious enough to question their methods or ask for legitimate explanations of where their money has gone.

Across my constituency, from the largest developments with more than 1,000 homes to the smallest with just a dozen homes, residents are benighted by the lack of transparency of those who run the management companies. Does my hon. Friend agree that a great step forward would be for the Government to insist on the timely publication of itemised accounts, so it is much clearer to residents how their money is allegedly being spent on their behalf by the management companies?

I absolutely agree and will come on to that as well. As a new MP coming into this place, I realised that some issues would be pertinent only to my constituency and others would reflect similar casework elsewhere, but when I reached out to colleagues to see who else was dealing with casework about estate management and particularly FirstPort, I was shocked at the response I got. At least half my hon. Friends on the Liberal Democrat Benches are supporting residents whose properties and estates are managed by FirstPort, and a dozen of us were in the room to question managing director Martin King when he responded to our invitation and came to Parliament to answer some of our more urgent questions. Following our invitation, he was also invited by Labour and Conservative MPs. He must feel very popular with so many invitations to Parliament, but it is rather a reflection of the desperation of so many of our constituents, who have exhausted all other avenues to raise complaints with FirstPort. Martin King’s company manages more than 310,000 homes across England, Wales and Scotland, so we are talking about at least half a million people dealing with just this one company. It is extremely disappointing to report that since the Lib Dem meeting, at which great things were promised, the only response we have received from the south-west regional operations director for the company has been one automatic email reply. It is not good enough.

It is the same experience for residents, is it not? When MPs ask questions of FirstPort, we do not get any replies. People turn up, smile and say nice words—soothing things—but nothing happens. The residents get the same thing. That includes a 94-year-old woman whose daughter contacted me to say that she was refused a request to install a stairlift and she cannot sell the property, because the management fees that FirstPort charges are so high, so she is effectively trapped, unable to get up and down the stairs. Is that not a disgrace and does it not go to show that FirstPort just doesn’t give a damn?

I agree that it is an absolute disgrace. We must have some kind of legislation to bring these companies to book. In the UK, we have a rather strange situation whereby a new housing estate is built, but the council may not adopt the new area, so the builder has responsibility for roads, green spaces and communal areas and then passes that on to a third-party management company. Residents end up paying council tax on the one hand and estate management fees on the other. These charges can increase at any time, with no accountability or redress. The Competition and Markets Authority has recommended ending the private estates model, which has been used for 40% of all new builds across Britain in the last five years, and potentially more, as the hon. Member for Warwick and Leamington (Matt Western) said. The CMA has recommended mandatory adoption by local councils of public amenities on new housing estates. Even when roads are accessible to the general public and green spaces can be enjoyed or used by anyone, residents can end up being responsible for their upkeep through service charges. The tenants of such developments pay both council tax and an estate management charge, yet they often receive a far worse service than those who live in adopted developments and are subject only to council tax, so I urge the Minister to consider ending the practice of shared ownership of public spaces for the vast majority of new developments. I would like to see a presumption that the shared areas around new developments are almost always adopted by the local authority where the development is standard in nature. Ahead of this debate, I asked the Chamber engagement team to engage with people who had signed relevant petitions. More than 1,100 people responded, one third of whom were freeholders. Ninety-four per cent said they were unhappy or very unhappy with the services provided by their management company; 94% said the service charges were unfair; and 94% said the transparency of what the service charges were for was completely inadequate.

My constituents living in Beansheaf Grange and Fairfields, to name just two developments in my constituency, recognise much of what the hon. Lady is saying. They tell me about high fees, poor service and uncleared rubbish, even leading to marauding rats. Will she join me in welcoming the firm action that this Government are taking to be in a hurry to address this deep unfairness?

I am glad that the hon. Lady says that the Government are in a hurry. We are looking forward to seeing the legislation come before the House. Out of the 1,100 people to whom I was referring, only 10 were happy with the way things were going with their management company. By anyone’s measure, that is a pretty shocking state of affairs. Respondents talked of shoddy workmanship, years of delays in getting repairs done, charges for gardening where no gardens exist, charges for new windows when windows are not replaced, charges for buildings insurance when there are no communal buildings, charges for new light bulbs when there is no communal lighting—it would be funny if it were not so serious. They talked of broken lifts, flooded car parks, leaking ceilings, including one that has been leaking for nine years, exorbitant insurance charges—the list goes on and on.

One other aspect worthy of scrutiny is the situation whereby a developer sets up a management company made up of family members of the original developer, leaving residents with a real challenge to get to the heart of who is truly accountable. That is something that I have seen in my constituency, and I am sure that it happens across the country. It is something that the Government need to address in whatever they come forward with.

The right hon. Member raises a very good point. The ownership of some of these companies is murky to say the least. Service charges are going up way beyond inflation, with no clear explanation of what the increases are for, and management companies refuse to give clear explanations when asked. At Camomile Lawn in Totnes in my constituency, residents were told that the annual contribution to a reserve fund had been increased from £2,000 to £8,000 a year—over 265%. Service charges were raised 23% based on a 10-year plan, but the plan was not shared with the residents, even when they asked. Accounting costs went up 55% in one year with no explanation given. This is a classic example of poor communication and a refusal to engage constructively with residents who want to understand the basis on which financial decisions are made. The lack of transparency around service charges has been debated in this House many times, not least in December 2023 on Second Reading of the Bill that became the Leasehold and Freehold Reform Act 2024. It is way past time that management companies were required to act responsibly, treat residents with respect and provide timely, straightforward and accessible information to all residents, regardless of their status as leaseholders or freeholders, and regardless of age. One resident said: “We feel like we are being taken advantage of because they see us as old.” That is a common reflection of those living in retirement villages. Too often, questions go unanswered, letters and phone calls are ignored, and justifiable requests for clarity and information on charges get rebuffed or given such poor responses that they do not mean anything. A delay in bill payment caused by asking a legitimate question often leads to a penalty charge for late payment—a sharp practice that clearly has to end. What is more, people are being forced to pay for the privilege of having asked those questions. One respondent said: “I received a bill of more than £2,000 for incurring charges trying to see where my money was being spent—£25 per email, £35 per phone call and solicitor charges on top. I felt completely robbed.” Older people often feel bullied by management companies—scared to question charges, confused by badly written statements and threatened with legal action if they are late paying charges because of wanting to question something. One resident said: “Our management company leverage their familiarity with legal processes and the vast financial resources at their disposal to bully and intimidate leaseholders.” This is not just about money; it is about how people feel living in a home that they may have put their life savings into buying. These homes are often sold as offering peace of mind, but one respondent said: “I’m drained, scared and mentally exhausted. It feels like I’m being financially and emotionally worn down for simply asking for basic transparency and fairness.” Another said: “My mental health has been seriously impacted by the state of our building. No one should be unhappy in their home or feel like they don’t want to go home.” When it comes time to sell, it is yet another tale of woe. Management companies do not respond to requests for information from solicitors; sellers are charged thousands of pounds for management packs that are required for the sale but take months to arrive; buyers get frustrated and pull out, and the price of the property is impacted. Meanwhile, service charges keep rising and ground rents keep being charged. As my hon. Friend the Member for Cheltenham (Max Wilkinson) said, people are trapped in their properties. Service charges can make it impossible to sell, as they have risen way beyond those charged on new properties in the same area. Dr Janet Richardson’s father bought a flat for £106,000 in 2006. In 2022, he had to move into a care home and she tried to sell the flat. Some months after putting it on the market she received an offer for £10,000 below the purchase price, which she accepted, but for months FirstPort did not answer requests for information, so eventually the buyer pulled out. The flat went back on the market at an even lower price, but still has not sold, three years after first being put on the market. Dr Richardson has now had to agree to sell the property through an assured buyer scheme and says there is likely to be nothing left once all the debts have been paid. She has shown me the figures—it has all gone. If FirstPort had done its job properly she would probably have sold the flat for a reasonable amount two years ago, but of course there is no offer of compensation from FirstPort. Finally, I come to the nightmare scenario that people face if they dare to attempt to get rid of FirstPort as the management company. Resident groups that have made repeated attempts to release themselves from FirstPort’s management have met resistance and obfuscation, forcing them to retain lawyers and pushing legal fees into the tens of thousands. Those cases have taken an emotional toll on residents, many of whom are elderly. One case in my constituency has been going on for three years and is still not resolved. South-west based Baker Estates has sacked FirstPort from a new estate at Dartington because of non-performance. The Duchy of Cornwall also sacked the company at the vast Nansledan estate in Newquay. It is more than clear that these companies are not doing their job. Their raison d’être is clearly not that of operating in the best interests of their residents. Estate management companies have had it too good for too long. As we look again in this place at leasehold properties, we must also look at the difficult situation for freeholders on privately managed estates. We need to bring forward leasehold reform as soon as possible. Does the Minister have a timeline for introducing the leasehold and commonhold reform Bill? Will the Government bring forward legislation to allow freeholders to challenge management charges and to take over the management of a development if they wish? Have the Government considered greater regulation of estate management companies, such as through an ombudsman, so that residents have some recourse when they encounter problems? If not, will they consider doing so? Will they introduce legislation to prevent management companies from charging residents for legal costs when they ask legitimate questions? Will they introduce legislation to professionalise the management of estates and buildings, with a basic level of service required and a mechanism for complaint and escalation that is easily accessible to residents? I look forward to the Minister’s response. I now leave it to other hon. Members to share experiences of the fleecehold nightmare.

I do not need to remind Members to bob if they wish to be called in the debate. We are busily counting how many there are. To get everybody in would effectively allow a little more than two minutes each. I do not want to go below that, because it becomes a bit meaningless. We will try to keep everything short, and it would help if interventions were minimised.

11:46:00

I am grateful to the hon. Member for South Devon (Caroline Voaden) for securing this debate. Since I first wrote on social media asking my constituents whether they had been affected by fleecehold, I have had hundreds of messages, showing how much of a problem this is across the country. The way we build, own and manage homes these days has become incredibly complex. It is frustratingly difficult to unravel it, or to hold anyone to account. I spent Tuesday taking officers from FirstPort around the Cornish properties that the company manages. It gave the residents a good chance to ask questions about repairs that had not been done and service charges that they felt were not transparent. The officers dealt with queries openly and constructively. However, it is frustrating that it took my intervention for that to happen. On Wednesday, I visited a relatively new estate in a village in the middle of the constituency, to look at—among other things—broken drains. The drains were not made to withstand cars driving over them, yet they are used in parking bays. The gulley does not drain and is blocked. Neither the builder, freehold owner, managing agent, housing provider nor council has accepted responsibility. Adoption is an issue. One resident I met had been living on the estate for 13 years. The developer, Persimmon, finished the estate in 2012 but, as I understand it, because the school included in the plans was not finished, the estate is regarded as unfinished. The developer continues to own the roads and some green spaces, and remains the residents’ managing company. Residents are stuck in limbo, unable to take on the freehold ownership, and have no control over the managing agents. Residents have spoken to me about yearly service charge increases, ranging from 16% to 30%. They get a letter from the managing agent with a breakdown of costs, which are very general, lacking any explanation of why they are going up. Procurement is also an issue. Residents of an estate in Truro were charged more than £12,000 in advance of felling a tree. That was the only quote obtained at the time and was added to residents’ bills as the maximum they could expect to pay, with the difference to be refunded in following years. That still has not happened, although that occurred about three years ago. Communication is a real issue: emails regularly go unanswered, property managers are unavailable or uncontactable, and owners’ meetings have not been held. I would like to end by quoting one of my constituents, who lives in a fleecehold property: “Overall it’s their lack of engagement and their attitude towards us that annoys many. They do what they want and charge us what they like and we simply have to pay up. There’s no regulation and virtually no way residents can complain…other than a potentially complex and expensive legal process.” I am hopeful that this environment will begin to change with the implementation of the Leasehold and Freehold Reform Act 2024 and the introduction of the leasehold and commonhold reform Bill. The Government are committed to ending the unjust practice of fleecehold and will hopefully consult this year on how to reduce the prevalence of private estate management arrangements. I am sure that will be welcomed by my constituents and others across the country.

11:49:00

I congratulate the hon. Member for South Devon (Caroline Voaden) on securing this debate. I want to give the House a message of hope. FirstPort was responsible for Lendy Place, a development in Sunbury in my Spelthorne constituency some 10 minutes’ walk from where I live. I was contacted by Mr Saponaro, who set up the residents association there. The usual FirstPort management company rap sheet was at play there, with a constant change of account managers, service charge hikes, substandard accountancy and depletion of funds. The company was even at one stage proposing to charge an additional £40,000 to accommodate post-Grenfell regulations. When it was pointed out that Lendy Place was only three storeys high so those regulations did not apply, FirstPort simply said, “Whoops, sorry, we overlooked that,” and the bill went away. The residents of Lendy Place were so disappointed with FirstPort’s performance that they did what the hon. Member for South Devon suggested, which can be a very tortuous process, and removed FirstPort as the managing agent. The residents are very happy with the new managing agent company, which, if I had texted a lot quicker, I would have a name for. I am meeting the residents of Lendy Place shortly and I look forward to reporting back to the House and similar forums how they went through the process of removing FirstPort. I can tell hon. Members with amazing tales of woe around this Chamber that there is hope. It can be done. With hon. Members’ support and no doubt their tenaciousness, Members’ residents can in future remove substandard management companies from their role.

11:52:00

It is a pleasure to serve under your chairmanship, Mr Stuart. I thank the hon. Member for South Devon (Caroline Voaden) for securing this debate. The Government face many issues as a result of the unholy alliance between weak regulation, private sector greed and the long-term underfunding of local government. We have here a particularly egregious example. Others have spoken, and will continue to speak about the business practices involved in the sector. I want to focus on how we have allowed a system to develop where service charges, and therefore residential estate management companies, are being used inappropriately. In some parts of the country people pay twice for the same basic services—once for their own and once for everyone else’s. There is an appropriate use of service charging for lifts, common areas and genuinely private outdoor spaces, but it should not be used for sewerage, most highways and the vast majority of play areas and open spaces. It is not uncommon to see a report to the council’s planning committee that says something like, “The council would not wish to take on the inspection and management of these areas.” We know why councils do that, but it must end and the Government need to act accordingly. My ask to the Minister is simple. The Government should implement section 42 of the Flood and Water Management Act 2010 to require utility adoption for new developments; create an equivalent for highways adoption; and direct councils that the default for publicly accessible spaces is that they are maintained publicly, whether that is by the principal authority or by the town and parish council.

11:53:00

It is a pleasure to serve under your chairmanship, Mr Stuart. Residents in Mid Sussex continue to fall victim to sky-high management fees and poor customer experience on a grand scale by companies such as McCarthy Stone and FirstPort. We need good quality homes for people to live in. We need them for first-time buyers, for growing families and for older people looking to downsize. Those looking for suitable housing in their later years in Mid Sussex often look to flats run by McCarthy Stone. Sadly, many of them and their families are being badly let down. Perhaps the most shocking example involves a constituent of mine in Corbett Court in Burgess Hill, where McCarthy Stone charges up to £14,000 a year as standard. An elderly Corbett Court resident was charged £8.54 for an on-site staff member to come to their flat and pick up a remote control. People in all stages of their life are finding themselves living on estates run by management companies like FirstPort. Constituents from Hassocks to Lindfield have written to me, setting out a raft of issues that residents are facing. FirstPort refused itemised breakdowns of fees despite huge increases, and in one instance a constituent was told that they had been incorrectly charged and were immediately told to pay £575 within three weeks—clearly a totally unreasonable timeframe, not least because the mistake had been made by FirstPort. All of that while residents tell me, “FirstPort’s communication has been non-existent and they are not completing their duties.” People have been through enough. If we want to successfully and sustainably grow our housing offer for future generations—young and old—something needs to change.

11:55:00

It is a pleasure to serve under your chairship, Mr Stuart. I declare an interest in that I own a flat in Liverpool that is currently managed by FirstPort, and I have personally been affected by many of the issues that my constituents have written to me about in recent months. Like many in leasehold flats in Portishead in my constituency, I purchased my first ever dream home off-plan. I am sad to say that that dream has become a nightmare, as it has for so many. Since coming into office nine months ago, I have been in contact with hundreds of constituents throughout North Somerset who have seen the realisation of long-held aspirations of home ownership turn into a slog to defend their rights against encroaching mega-corporations intent on squeezing every penny possible from ordinary, hard-working people. From those conversations, it has become clear to me that estate management companies are rip-offs; they utilise every legal means at their disposal to squeeze leaseholders out of every last penny they can. By using a complex web of separate legal entities, they can facilitate an intricate trickery, designed to pull the wool over honest homeowners’ eyes to ruin their quiet enjoyment. To give credit where it is due, the Building Safety Act 2022 was most certainly a step in the right direction, making it clear when and where financial obligations would be laid at the door of freeholders. I am sad to report that in the years since, we have seen freeholders, aided by estate management companies, do everything in their power to delay and resist. It is nothing short of scandalous. I look forward to the inevitable ITV drama that we will one day see, and which will finally prompt sufficient action to bring this sad chapter in our nation’s history to an end. I could easily stand here and recount for hours the innumerable injustices suffered from estate management companies by constituents throughout North Somerset, but I recognise that my time is limited, so I wish to focus on the pair of buildings only a few minutes’ walk from my constituency office in Portishead, Ninety4 on the Estuary and 110 @ The Quay. After years of dragging their heels, it finally took the residents’ plight reaching regional news to shame the freeholder and developer into agreeing to shoulder the cost. However, since then residents have been subject to an unending stream of additional costs and excessive service fee increases, seemingly as the aforementioned entities try to recoup losses. With another delay always around the corner, understandably so many of our constituents feel that the system is no longer capable of serving their interests and needs to end. Leaseholders in these buildings feel stuck in this battle, which has been raging for years now, and have felt powerless and trapped, unable to find buyers despite offering significantly under market value. Similarly, potential buyers have struggled to obtain mortgages due to uncertainty over cladding issues, with a deep sense descending on residents of the twin buildings that they may never truly escape the nightmare that they have found themselves in. Hundreds of constituents, not just in those buildings but in dozens of similar situations across North Somerset, have asked me for help in finally bringing this shameful situation to an end. That is why I am thankful to the hon. Member for South Devon (Caroline Voaden) for securing this important debate. I look forward to seeing what remedies the Minister has in store in the upcoming leasehold and commonhold reform Bill, which I understand will be introduced to Parliament later this year.

11:58:00

I thank my hon. Friend the Member for South Devon (Caroline Voaden) for securing this important debate. I purchased my home in 2017. By the time I surrendered a deposit of several thousand pounds, which had taken me a decade to accrue, I had already engaged with a financial adviser, secured a mortgage in principle and researched my eligibility for a Government equity loan. I had already picked the carpets by the time I was told to sign an estate management contract. The concept was completely alien to me; it was explained that on top of my council tax—paid to a local authority to maintain my public services—I would now pay a private company to maintain certain other things around the development. If I declined, I was not allowed to buy a home. It felt a lot like blackmail. It is worse than I realised at the time; the private company is entirely unregulated and it can, and does, charge me and fellow residents whatever it wants for services. Residents can, and often do, see their annual bills rise severalfold. In serving her local residents, the excellent local councillor Sarah Hands for the Innsworth ward can regularly be found mediating an abdication of responsibility between Persimmon Homes—it still has not passed the estate on to the local authority almost a decade after moving offsite—the local authority, Severn Trent Water and the estate management company. FirstPort is so notoriously difficult to even find a point of contact for that residents give up and then Sarah Hands gets it in the neck instead. I echo the requests made by the hon. Member for Mid Cheshire (Andrew Cooper). The restructuring of local government gives us an opportunity to end this scam, return estates and services to the local authorities, and outlaw the practice of signing these contracts at the point of house purchase.

00:00:00

In their interactions with management companies, my constituents feel done to, shut out, left behind and ignored. It feels like my constituents are hearing one message—“You don’t matter”—but my constituents do matter, and I want to represent some of them in this debate; sadly, time will not allow me to mention them all. Two of my constituents live in two separate properties in Bournemouth East. They have been defrauded by Initiative Property Management, the sudden collapse of which left leaseholders with depleted reserve funds and significantly out of pocket. One leaseholder estimates that they have lost £80,000 and that they and the other residents in their block have lost around £1,200 per flat per year. Another estimates a total loss from fraud at around £10 million. A serious fraud investigation is under way. Another constituent has suffered at the hands of the management company Scanlans Ltd, which has asked for £5,000 a year from them and other residents but has done nothing to maintain the garden and communal areas. At one point, a dead rat was left in the communal area for months. Scanlans is now in ongoing communication over plans to address those issues, but no clear action has yet been taken. Another constituent has had to deal with Residential Management Group. RMG refused to deal with a rat infestation, and left the door to the communal area unsecure, with homeless people breaking in to sleep there. The case has been taken up with RMG and is ongoing. The themes that many of us will discuss today are common: excessive and unjustified service charge increases, a lack of transparency and financial accountability, poor communication if any at all, and poor building maintenance and unresolved issues. Enough is enough. I want my constituents who are watching, feeling let down and having been left out of pocket by unacceptable conduct, to know that as their MP I will continue to fight on their behalf and alongside them for justice. I will continue to work to ensure that nobody else has to suffer the hardships, anguish and abuse that they have suffered. We are fighting this together. We are making progress, and I am pleased that the Government are in a hurry to address this important issue.

12:02:00

It is a pleasure to serve under your chairmanship, Mr Stuart. I commend the hon. Member for South Devon (Caroline Voaden) for securing and leading this important debate. Many Members are aware of the efforts to change the law and raise the profile of the fleecehold campaign by the Home Owners Rights Network. HORNET has revealed that 960 sites across the UK are affected by this practice, with a staggering 213,000 homeowners affected. I want to touch on the fantastic local work being done in my constituency of Bridlington and The Wolds. I pay particular tribute to the great work being carried out by the Wolds View action group, which is based on the Bellway estate in Driffield in my constituency, led by Dr Jenny Shaw and the residents of the Wolds View estate. Another affected development, the Mortimer Park estate, which is also in Driffield and was developed by Barratt Homes, consists of 165 properties, with another 120 being built. Those are just two local examples I am aware of, but there are others in my constituency in Market Weighton, Hornsea and Bridlington. To echo the stories we have heard in this debate, many residents feel that they were not told adequately at the time of purchase about what was to come in terms of estate management. Many feel they face the double whammy of estate management costs and their council tax payments. Further to what the Minister has set out in the House in recent months, I urge him to adopt the Competition and Markets Authority’s 2024 recommendations as a matter of urgency to ensure common adoptable standards, and to mandate the adoption of public amenities on new housing estates. However, we must not leave existing homeowners in limbo. Residents such as my constituents at Wolds View and Mortimer Park deserve equal protection. I would appreciate the Minister clarifying in his closing remarks what specific protections will be extended to the 200,000 homeowners currently affected. Let us be clear: they are freehold residents who own their own homes. The language used by the Government when discussing this issue has been, on occasion, particularly disappointing, and needs to be clearer when separating the issues of freehold and leasehold. My constituents are not leaseholders in this instance, and it would reassure them if the Minister would outline how the Government intend to address this specific area. I am grateful for the opportunity to raise these concerns on behalf of my constituents. It is not a local problem; it is a national issue that needs swift and decisive action from this Government.

12:05:00

It is a pleasure to serve under your chairship, Mr Stuart. I thank the hon. Member for South Devon (Caroline Voaden) for securing this important debate. This issue comes up time and again in my postbag, particularly from residents in Wymondham town in South Norfolk. My constituents have raised three clear and pressing concerns, which I hope the Minister will be able to address in his closing remarks. First, there is a glaring lack of accountability and transparency when it comes to estate management companies. Residents are often left with no clear route to challenge fees or demand better services. At a time when every penny counts, we cannot allow these companies to make up charges on a whim and profiteer at the expense of hard-working families. Secondly, there is no effective legislation compelling developers to hand over services and responsibilities in a timely and orderly fashion, resulting in confusion, inconsistency, and, in many cases, residents caught in limbo. Thirdly, and perhaps most importantly, residents on these estates are paying twice: once through council tax, and again through ever-increasing estate management fees. In return, they often receive a poorer level of service than their neighbours who do not live on managed estates. I recently sat down with Kevin, a constituent who lives on a Persimmon estate in Wymondham. Like many others, Kevin’s experience has been frustrating and, frankly, unacceptable. Some services on his estate have been adopted; others have not. The local highways remain unadopted, and the water and sewage infrastructure is still being managed by a private management company, because Anglian Water has not yet adopted it. Kevin and his neighbours are left paying for a system that does not work properly, and they are rightly asking: why? I want to put Kevin’s question directly to the Minister: why can developers not be made responsible for the upkeep of estates until full adoption by the relevant authorities is complete? This is not just a question of regulation but a matter of fairness. If we believe in levelling up and supporting our families in every part of the country, we must act to ensure that residents are treated with respect, and to give them the services they pay for. I look forward to hearing the Minister’s response.

If colleagues are able to speak for 90 seconds, that will be tremendous.

12:07:00

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.

I call the ever-succinct Rupa Huq.

12:10:00

Thank you, Mr Stuart. Residential estate management companies are middlemen who sort things out per the lease—or notorious scammers, as our constituents call them. A few weeks ago, residents in Western Circus in east Acton were left without running water—a basic human right—between Friday and Wednesday, so for nearly a week they could not flush the loo, change babies’ bottles, wash their hands or brush their chops. Who was the managing agent? The notorious FirstPort—a word that strikes fear into every MP’s heart. It did not contact residents for over 24 hours. The building is a new build—I remember going to the topping out ceremony in my hard hat and high-viz jacket. Those 329 flats with 400 residents were left without running water, and for 24 hours they were in complete limbo. When the company finally made contact, it was very half-arsed—sorry, that is not parliamentary language. I was on a Zoom call with residents, and it was very “Computer says no.” There was a reluctance to do anything about it, and I think that is shocking. People have talked about fleecehold. I have talked to many FirstPort victims: just the other day at my advice surgery, I spoke to a grieving father trying to sort out his son’s estate. He found all these unexpected charges, because FirstPort hoovers up ground rent and then springs all these nasties on people. Leasehold covers millions of dwellings and is particularly common in London. Reports from the CMA, the Resolution Foundation and Which? have found that people are disempowered and are charged unexpected, unfair fees. People are losing money hand over fist—for what? We do not know exactly. I think my 90 seconds will end any second, so let me just say that MPs and the Facebook group have been decisive, but it is not good enough. We need proper action, so I am glad the Government will introduce a new commonhold tenure to end the neo-feudal tenure of leasehold, which has been there too long. Western Circus is being run by clowns—it needs to stop.

12:12:00

It is an honour to serve with you in the Chair, Mr Stuart. It is plain from what others have said that this is a sector-wide problem. In 2017, Sajid Javid, when he was the Secretary of State, set up the regulation of property agents working group, under Lord Best. When it reported in 2019, it recommended “a model for an independent property agent regulator” and “a single, mandatory and legally-enforceable Code of Practice for property agents”. The Government would do well to follow that advice. I want to refer to the constituency case of Cathy Gardner, a resident of Sidmouth. Since 2017, her insurance premiums payable to Blue Cedar Homes management company have risen from about £100 a year to as much as £900 because she is being charged for every single eventuality, including terrorism. Now, we do not have a great deal of terrorism on the retirement estates of mid and east Devon, so I can be certain that a large cut is being taken out of that fee. We need transparency so we can all know why that is happening and where that money is going.

12:14:00

It is a pleasure to serve under your chairship, Mr Stuart. I thank the hon. Member for South Devon (Caroline Voaden) for securing the debate. My constituents at Vickers Green in Crayford have experienced similar problems to other constituents. The Conservative council granted their Barratt Homes development, consisting of 247 homes, planning permission in 2009. The local planning committee’s report confirms that management of “the estate roads, the communal areas, the play facility, the ecological area, the open space area etc” will technically be the responsibility of the homeowners. It also confirms that the construction and maintenance of internal roads and parking areas, although not carried out by the council, will need to be carried out “to the Council’s satisfaction.” That has caused real problems for my constituents, who are paying their council tax but also having to pay charges for these things. More recently, my constituents found that FirstPort is their management agent. This year it informed them that there was a £44,000 overspend in 2022, which they are now expected to pick up, in 2025. One constituent was told they had to pay charges for the two months before they moved into their property. Many residents have also seen the £600 charge for picking up responsibility for the communal areas and roads more than double in recent years, and they feel there is a gross unfairness in that. I therefore welcome the Government’s planned changes. I would also welcome comments from my hon. Friend the Minister about what the Government propose to do to protect leaseholders from the kinds of abuse and poor service they have experienced, and about how some of these communal areas, which would traditionally be maintained by local authorities, might be returned to them, rather than being the responsibility of FirstPort, and therefore of homeowners themselves.

12:16:00

It is a pleasure to serve under your chairship, Mr Stuart. I commend the hon. Member for South Devon (Caroline Voaden) for setting the scene so well. I recently met one of the management companies in my local area, where residents had lodged a list of queries after their management fees went up by a substantial amount. They asked where the money had gone. It is difficult to see why fences still need painting when there is a bill for paint, and it is hard to understand why there is a bill for the upkeep of a sign that does not appear to have been cleaned in years. The difficulty with these companies is that, with no regulation of them, residents feel they are being done over. It might be best if I quote one of my constituents and then offer a solution. My constituent said: “I am writing as a resident to express serious concerns regarding the management of communal land. Like many homeowners across the UK, I am facing high and increasing charges for substandard maintenance, with no option to switch providers. The company operates a monopoly in many estates, charging fees that are neither transparent nor fairly regulated. Residents are often left with poorly maintained green spaces despite paying substantial fees. Furthermore, there is no option for estates to collectively choose a different management company, leaving homeowners effectively trapped in an unfair system. I am asking for your support.” She is asking me for my support, and I am asking the Minister to address this issue. The solution my constituent suggests is introducing “a cap on the fees that land management companies like Greenbelt can charge homeowners” and creating “a legal mechanism that allows estates to vote on who manages their communal land, giving residents the freedom to choose better service providers.” She finishes by saying: “Many homeowners across the UK are affected by this, and I believe it is an issue that requires government action.” I look to the Minister to ensure that we address this issue UK-wide, and not simply in England and Wales. Residents across the United Kingdom face the same problems as residents in Strangford, and they must be addressed.

12:18:00

It is a pleasure to serve under your chairmanship, Mr Stuart. I thank the hon. Member for South Devon (Caroline Voaden) for securing this important debate. My constituents are being treated as a cash cow. There are managing agents causing a problem across my entire constituency, and I have casework in Alsager, Congleton, Sandbach and Holmes Chapel. I do not have time to go into every one of those items, but the worst—the hon. Member for Honiton and Sidmouth (Richard Foord) referred to this—relates to insurance charges for terrorism. I am not flippant about terrorism, but retirement properties in Alsager are unlikely to be victims of it. The retirement community in Alsager received a £14,000 bill for electricity in communal areas, where there were approximately three lights. Residents challenged that bill, which suddenly became £7,000, with no explanation as to why it had halved or why it had been £14,000 in the first place. They challenged it again, but they still do not have a proper breakdown as to why so few lights cost so much money—they simply cannot get that information. As others have mentioned, when people challenge bills, they get charged again and again. There is an absolute lack of transparency about these organisations and about transactions, including where insurance is being bought from connected parties. There is a real question about whether corporate governance as it stands is fundamentally capable of addressing some of these issues. I absolutely second the calls by my hon. Friend the Member for Mid Cheshire (Andrew Cooper) for the adoption of section 42 of the Flood and Water Management Act 2010, the creation of an equivalent for roads, and the requirement for play areas and public areas to be adopted by local authorities. I am worried that the charges my constituents see are just the beginning and that, as their estates age, those charges are likely to become significantly larger, particularly in unadopted areas. Will the Minister please confirm what we can do about these many issues?

12:20:00

It is a pleasure to serve under your chairmanship, Mr Stuart. I thank my hon. Friend the Member for South Devon (Caroline Voaden) for her excellent and comprehensive speech, as well as for securing the debate. My constituency of Didcot and Wantage in Oxfordshire has seen enormous population growth. New estates affected by these issues include Highcroft and Winterbrook Meadows in Wallingford, Fuller’s Grove and Hamilton Drive in East Challow, Dida Gardens and Great Western Park in Didcot, Kingsgrove in Wantage, and Cholsey Meadows. With 30,000 more homes planned in the surrounding area by 2041, the issue will clearly not go away. Companies that have caused some of the issues that have come across my desk include not only FirstPort, but RMG, Remus and Home Group. My residents have experienced many of the issues mentioned by hon. Members, including arguments and a lack of accountability regarding responsibility for maintenance issues, a lack of transparency around fees and a lack of ability to influence management companies. As my hon. Friend the Member for Tewkesbury (Cameron Thomas) highlighted, the details of the fees and charges that will apply are sometimes revealed only towards the end of the purchase process, and are mysteriously absent from the pretty brochures that promote such sales. I have seen examples of residents valiantly taking on estate management companies—for example, Home Group in Mersey Way and Venners Water, in Didcot—and securing far more reasonable charges than those originally proposed. However, that needs to be made simpler, so that residents in Springfield Way, in Sutton Courtenay, and on the Dovecote estate, in Drayton, can build on that excellent experience. We clearly need a lot more regulation because the market has failed in this area.

12:21:00

It is a pleasure to serve under your chairmanship, Mr Stuart. My constituents tell me over and over again about the poor performance and lack of accountability of residential estate management companies. In this country, the truth is that there is a complex web of operating companies, parent companies and, in some cases, companies registered in offshore tax havens, with no individuals to hold to account. It should not be like that, and it does not have to be like that. Some management companies have turned dreams of home ownership into absolute nightmares, and that is certainly the case for my constituents in Barking. Residents of John Miller House and Leslie Hitchcock House on Minter Road face ongoing issues with their management company, RMG, and the district heating system that is in place. They face high, unexplained charges for their energy, including service charges that are not itemised. RMG has failed to install energy meters in individual properties, despite residents asking for them and RMG promising them. In the meantime, constituents in these properties have been charged arbitrary estimates for their energy, including for energy they have not used. RMG has threatened them with legal notices and has in some cases demanded £6,000, be paid in 10 days. That is simply unjustifiable. In my most recent interaction with RMG, it showed some willingness to engage and to rectify the situation, but it has also been clear that it is acting on behalf of a freeholder—a company called HomeGround. After a little digging around at Companies House, I have established that Baron William Astor is a director of HomeGround.[Official Report, 25 April 2025; Vol. 765, c. 13WC.] (Correction) This is a family with a long-standing connection to Parliament who have made their fortune through land and property. Now, they are seemingly exploiting my constituents through unfair energy bills and threatening them with legal action. Frustratingly, I am still waiting for a response from HomeGround. That is just one of the many examples faced by my constituents.

12:23:00

It is a pleasure to serve under your chairmanship, Mr Stuart. I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests, because I am a local councillor. I also understand this issue more than most, because I live in a leasehold property. I have a number of cases across my constituency of Broxbourne of leaseholders being ripped off by management companies, including High Leigh in Hoddesdon; Academia Avenue, Robinia Road and Watery Lane in Turnford; Aldermere Avenue and Magnolia Way in Flamstead End; and Eleanor House in Waltham Cross. These companies are completely unaccountable. There is a lack of transparency, and they simply do not care. If they deem that residents have underpaid by £10, or even £1, they are straight round to their door. However, when my residents—or constituents across the country—write or email asking for answers to their questions, these companies are absolutely nowhere to be seen. That is absolutely shocking, and it cannot be allowed to continue. As we have heard from Members across the House, our postbags are full with issue after issue. Sadly, I am yet to come across a company that is good in this area. In the limited time available, I want to touch on the issue of solicitors and what people are being told when they buy these properties. Solicitors are not doing enough to point out all the red flags, including everything that residents are accountable for, what money they may have to pay and the previous accounts of the different estates. We really need to shine a light on the issue of solicitors; we cannot let them off the hook. I will be interested to hear the Minister’s view on that.

12:25:00

It is a pleasure to serve under your chairship, Mr Stuart. Issues with leasehold, fleecehold and management companies might seem quite parochial, but they are actually quite pernicious and affect an ever-growing number of homeowners across the country. As the CMA pointed out, with over 80% of new developments now subject to fleecehold, it is increasingly the default model for housing delivery. That means that thousands of new homeowners across the country are on the hook for what is effectively a stealth tax, trapped paying a management company for a service—or the lack of a service—that a council would normally provide. Alongside that, the agency that home ownership is meant to deliver is being undercut. Residents are often hit by punitive mortgage charges by overly penal management companies, and their home sales can fall through as a result of companies not providing paperwork quickly and efficiently. If we are going to live up to our ambition to deliver on the aspiration of home ownership for many more households across the country, we clearly have to tackle fleecehold, which is why I was so pleased to see the commitment in the Labour manifesto to do that. What do we do? We know that switching on some of the regulatory provisions in the Leasehold and Freehold Reform Act from the last Parliament will have some benefits for these homeowners, but we need to go much further. My ten-minute rule Bill, which was introduced before the recess, set out some important measures on the right to manage and on common adoptable standards, as well as on mandatory adoptions. I think that those will go a long way towards starting to tackle this issue at source for future households. We need to think about what more we can do to support those homes that are already being impacted. We also need to think about what more we can do in the interim to prevent more unadopted estates from becoming the norm before we can act. I was pleased to join over 50 colleagues in writing to a number of large developers to challenge them on what more they can do with local authorities to prevent unadopted estates from becoming the norm. I would welcome the Minister’s reflections on what more we can do in the meantime to move on that ambition.

12:27:00

It is a pleasure to serve with you in the Chair, Mr Stuart. I thank my hon. Friend the Member for South Devon (Caroline Voaden) for securing this important debate. Residential estate management is a scandalous reality affecting thousands of people across the country. Residents are left to navigate this complex landscape alone, often forced to pay escalating and unchallengeable fees for services they did not agree to, provided by companies they cannot remove. Stephen from Glastonbury is permanently tied, alongside his neighbours, to contracts with FirstPort that are written into the Land Registry. They are charged £560 annually for minimum maintenance of open spaces, with fees rising annually despite declining standards. The residents are billed for obscure services, and when questioned, FirstPort offers vague justifications and claims that costs are rising to meet expectations. Whose expectations? They are certainly not the expectations of residents. Another constituent, Anne, moved into her flat on Cavalier Way in Wincanton a year ago, having budgeted for a manageable service charge of £750. Within the last few months, she has been hit, without any consultation whatever, with a shocking £7,000 invoice from RMG, the management company, to cover stairwell repairs. By labelling that cost as a budget, rather than a service charge, RMG seems to be attempting to sidestep the legal protections of section 20. When I met other residents of Cavalier Way last week, some told me that their costs were rising by a staggering 479% and that they simply do not have the means to pay those grossly inflated service charges. The Liberal Democrats believe that that must change. We have long called for leasehold reform and the professionalisation of estate management so that homeowners can control their own properties.

I call Danny Beales.

12:29:00

Thank you, Mr Stuart, but I believe you have mistaken me for another ginger—there are a few of us in this Parliament.

Yes, I have. Apologies.

It is a pleasure to serve under your chairmanship none the less, Mr Stuart, and I congratulate the hon. Member for South Devon (Caroline Voaden) on securing this debate. We are at the foothills of a historic era for housebuilding, but the question is: what happens after we build those houses? Residents across my constituency are being hit by the fleecehold stealth tax. They pay for services twice: once in council tax and again in estate charges. I recently heard from residents of the Ladgate Woods development, who were contacted by their property management company with an unexpected bill to cover their neighbours’ unpaid bills, despite already having paid their share in full. It cannot be right for responsible residents to be punished for doing the right thing. Management firms are often faceless companies based miles away—or even abroad, as we have heard today—and they are completely unaccountable. Residents are left powerless, with no control, choice or clarity. There needs to be a clear pathway to the adoption of new developments by local councils, with a timeline for residents. To that end, I support the private Member’s Bill of my hon. Friend the Member for Hitchin (Alistair Strathern); I also take this opportunity to congratulate him on his recent engagement. It is time that we ended the postcode lottery in which some homes are served by local councils, and others by firms that one would struggle to get on the phone. It is time we strengthened consumer protections for ordinary working families and put power back where it belongs: in the hands of residents.

12:31:00

It is a pleasure to serve under your chairmanship, Mr Stuart. I thank my hon. Friend the Member for South Devon (Caroline Voaden) for securing this debate. I have been supporting residents of both freehold and leasehold properties in Esher and Walton who are confronting a system that allows management companies to oversell seemingly attractive properties, but makes it extremely challenging to hold them accountable for overpriced services and service failures, or to get rid of them. I hope that the Government will look closely at the business model of such companies and the tactics that they employ. In my constituency, I have supported residents of an estate composed of later-living leasehold flats spread across five blocks, who have secured the right to manage away from FirstPort. However, because the blocks are separate buildings, the residents of the 38 flats were required to establish five different right-to-manage companies, even though communal areas remain under the management of FirstPort. I urge the Government first to ensure that separate buildings on a single development can pursue the right to manage together, and secondly, to expand that right so that it covers communal areas. What consideration have the Government given to creating a statutory right to manage for freeholders that encompasses communal areas? Many leasehold developments are principally intended for the elderly. Elderly residents often live in them for a comparatively short time and selling such leasehold properties is extremely challenging, so families often subsequently look to let them. FirstPort imposes a charge of 1% of a property’s market value as a condition of letting it, and frequently overvalues properties in order to charge more. That one-off payment recurs each subsequent time the property is let. What is the Minister doing to protect elderly people from exploitative leasehold conditions in elderly living accommodation?

Order. With apologies to the five or six Back Benchers who have not been called, I call the Liberal Democrat spokesperson.

12:32:00

It is a pleasure to serve with you in the Chair, Mr Stuart. I congratulate my hon. Friend the Member for South Devon (Caroline Voaden) on securing a debate on residential estate management companies—an important issue for many of us up and down the country, and many of our constituents. My hon. Friend has done a service both to her constituents and to people across the country by exposing, and placing on the record, the scandal of poor management companies. I do not want to denigrate companies that do a good job for the common areas and spaces that they are contracted to look after, but, as we have heard today, Members of Parliament too often hear how far too many companies are fleecing residents, charging rip-off prices and failing to respond to reasonable requests for repairs, information or accounts of how residents’ money is being spent.

In the town of Teignmouth in my constituency of Newton Abbot, FirstPort has been buying up other management companies, and the sinking funds—the contingency paid by residents—appear to have disappeared: they have been sunk. Does my hon. Friend agree that that should be looked into?

I completely agree with my hon. Friend, who is doing a great service to his constituents by exposing that problem. In too many constituencies, residents are plagued by rogue developers who provide housing under a freehold tenure, but force residents to accept the estate managers or shared owners of public spaces within the developments. We have heard shocking examples from all over the country, which surely demonstrate the scale of the problem and the need to act. In one block of flats in my constituency of Taunton and Wellington, people have been unable to get repairs for a leaking roof from the owner of a building in Corporation Street—it has been leaking for nine years without being attended to.

In my constituency of South Cotswolds, there are tragic stories, including about disabled residents being trapped in their flats due to a lift being out of order. Another constituent was informed that their charges had risen from £1,500 to £2,100 per six months. Does my hon. Friend agree that we need urgent action from the Government to end this daylight robbery?

“Daylight robbery” is a good way of putting it. Those staggering increases in charges, with very little notice or warning to residents, are experienced in many of our constituencies, including my own. In my constituency, I am receiving complaints about FirstPort from residents of Parsonage Court in Wellington, and from those of Quantock House, Pavilion Gardens, St George’s Square and Firepool in Taunton. I am also receiving complaints about Cognatum Estates from residents of Cedar Gardens and Fullands Court. These issues are arising in a whole range of properties.

One of my constituents, Mr Vivian Lythgoe, is here today because of FirstPort. Unfortunately, he has had to make the painful decision to sell his home because he is fed up with dealing with management companies that are not interested in leaseholders. He has been fighting FirstPort to try to make it carry out basic maintenance, which residents have already paid for. Residents are not cash cows for management companies or footnotes in company accounts; they are people. It is time that they were treated as such. Does my hon. Friend agree?

My hon. Friend is absolutely right. It is time for this shocking behaviour to be rectified and for legislation to be introduced. I will continue to work for the residents of the properties in my constituency that I have mentioned, and to get the legislation that we need. Those who suffer from poor management can, of course, be leaseholders or freeholders. There are 4.8 million residential leasehold properties in England, which is equivalent to a fifth of the housing stock. That system is a relic of the feudal period. Its abolition has long been sought by Liberals and Liberal Democrats. The abolition of residential leasehold could be one of the most important carried-forward pieces of business from the last Liberal Government of about 100 years ago, which goes to show how long overdue it is.

In my constituency of Horsham, we have many similar examples. Would my hon. Friend agree that although we certainly need legislation, the industry could act right now by introducing a voluntary code of practice? The industry does not have to wait for legislation; it should hear the call from across this Chamber.

My hon. Friend is absolutely right and is championing the issue in his constituency. The companies watching or reading the debate would do well to listen to his words, because they could easily improve their practices right now by introducing a code of practice, as he suggests. Liberal Democrats believe that leasehold tenure should be abolished for all properties, including flats. For too long, homeowners have been exploited by what is ultimately a feudal system. Existing residential leasehold should be converted either to freehold or commonhold, as appropriate, and we urge the Government to introduce legislation to make that happen. On commonhold properties and commercial leaseholds, ground rent should be capped to a nominal fee, so that everyone has a degree of control over their property. Of course, the Conservative Government introduced to Parliament the Leasehold and Freehold Reform Act, which received Royal Assent in 2024. However, the secondary legislation, which would give leaseholders rights over their freeholder landlords when it comes to accounts and accountability in general, has failed to be enacted. Crucially, the Act fails to regulate property management agents. As my hon. Friend the Member for Honiton and Sidmouth (Richard Foord) pointed out, there has been widespread agreement about that since the 2019 report chaired by the Cross Bencher Lord Best, supported by the Liberal Democrats in this House and in the other place. We need to see vital improvements to the 2024 Act. I hope the Minister will today confirm when secondary legislation will be introduced, or indeed other legislation on the regulation of property agents. Liberal Democrats want the management of buildings to be professionalised. Building maintenance and safety need to be guaranteed, not dependent on whoever happens to be the freeholder. Nowhere has that been more important in terms of safety than in the entirely avoidable but tragic disaster of Grenfell Tower. Putting profit before safety, as Sir Martin Moore-Bick’s report has found, was one of the chief causes of that fire. Just as profit-driven sign-off in the testing of building materials and in the inspection of buildings needs to be reversed with the ending of both the privatised Building Research Establishment and privatised building inspectors, so too there is surely now a need to regulate property agents—for safety reasons, as much as anything else. Today is also Stephen Lawrence Day. As Stephen was a budding young architect, it is fitting that we are debating regulating building management agents; it would be even more fitting if there was a commitment today to bring legislation forward. Just as leaseholders are charged extortionate amounts while being poorly served by the landlords and estate management companies they employ, too many freeholders of their own homes find themselves beholden to others over whom they have no control in relation to the open spaces and common areas, as my hon. Friend the Member for Glastonbury and Somerton (Sarah Dyke) mentioned.

My own local council is attempting to address the issue of fleecehold through its new local plan, which I commend. Would my hon. Friend urge the Government to bring forward the legislation quickly in order to strengthen the council’s position?

My hon. Friend must surely have read the next words of my speech, which urge the Government to make urgent progress on strengthening leaseholders’ rights and on their draft leasehold and commonhold reform Bill. We should, for example, make sure that legislation strengthens leaseholders’ rights to extend their leases, to buy their freeholds, to take over the management of their buildings and to make commonhold the default tenure. We should also regulate ground rents for existing leaseholders, and freeholders too: it is surely time for legislation to enable freeholders to recover ownership and control over public spaces that surround and adjoin their homes, which are held by others for no reason other than to extract maximum payment. A single freeholder among many who exercises control over common areas, such as access roads and green spaces, should no longer be allowed to hold all other homeowners to ransom with ever increasing charges and unreasonable management practices. Back in December last year, my hon. Friends on the Liberal Democrat Benches, led by my hon. Friend for South Devon, were the first to bring the directors of FirstPort to the House to account to MPs for their management. My hon. Friend has blazed a trail for those affected by the appalling management of common areas and public spaces. I return to the issues in my constituency. One resident in Wellington has been unable for over a year to get reasonable adjustments for disabled access to her parking space, even though she is also a cancer sufferer. We have seen now that persuasion on its own is not enough. Just as it is high time for residential leasehold to be brought to an end, it is also time for legislation to enable freeholders of common areas to acquire open spaces and common areas from those who would hold ransom over them. As Liberal Prime Minister Lloyd George pointed out, these practices are not business but blackmail.

12:43:00

It is a pleasure to speak with you in the Chair, Mr Stuart. I congratulate the hon. Member for South Devon (Caroline Voaden) on securing this important debate; the strength of feeling from the people speaking has been strong. Companies such as FirstPort should take note of that when it comes to the services they offer. I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I will keep my remarks brief to give the Minister plenty of time to respond—the ball is very much in his court, as he knows—but I also might give time for interventions from Members who have not been able to make speeches in the main debate. It is safe to say that I will not mention every speech by name, as that would take too long, but I very much agree with the essence of all the contributions today. I have come across these issues in my constituency, in estates in Malton and Easingwold. FirstPort was invariably the managing agent causing many of these difficulties. The best regulator is always competition. We need to make sure that it is easier for people to manage their own freehold estates and to swap between different managing agents. The speeches today have had in common references to high and sometimes spurious charges, as well as poor and obscure service. That is something I certainly recognise. I also recognise, and am frustrated by the fact, that local authorities have moved to the model of granting consent for what have become known as fleecehold estates. It seems that residents on these estates do not understand why they have a two-tier system, paying council tax and for the management of the freehold estate, when other people in their locality do not. It is time look at this in more detail and to act. I am happy to have a cross-party conversation with the Minister on how we might work together to make sure this situation does not become worse. We should all note the excellent work of the Competition and Markets Authority on making sure that the default position is to have adoptable standards. I thank my hon. Friend the Member for Broxbourne (Lewis Cocking) for highlighting a point I do not believe anyone else did: the work of conveyancers. Conveyancers have moved towards a shed-based service. It used to be there was a local, friendly solicitor who would give good advice on a buy and the implications of it, but much of that has gone. We need to make sure our conveyancers are doing the right thing in terms of pointing out to someone buying a fleecehold property the potential problems for which they might have to take responsibility. As has been mentioned, we legislated in this area in the Leasehold and Freehold Reform Act 2024. This gives the potential to challenge charges, makes the right to manage easier, and opens the door to first-tier tribunals on charges and to an ombudsman scheme. This is where I would like to ask the Minister some questions. He has a role in implementing the provisions of the Act, which will require secondary legislation. As I think was stated in his White Paper, consultation may also be required, both on right to manage and on potential access to ombudsman oversight of the companies managing these estates. He needs to approve an ombudsman scheme and publish guidance. To what timescales does he expect implementation to take place? For the residents Members across the House have discussed, there is clearly a pressing need. Regarding the White Paper and the potential of the leasehold and commonhold reform Bill, I am interested in which specific further steps the Minister intends to take on oversight of these fleecehold situations. We also need to be clear on exactly where he is going with leasehold reform. The manifesto the Minister stood upon said very clearly that Labour would “finally bring the feudal leasehold system to an end”. If that is his intention, is he talking purely about new leases or about existing leases? Clearly there are difficulties around those. Finally, there is talk about a cap on ground rents. We have previously talked about a peppercorn charge. Where exactly is the Minister going with that? People need to know exactly what his intentions are.

12:48:00

It is a pleasure to serve with you in the chair, Mr Stuart. I congratulate the hon. Member for South Devon (Caroline Voaden) on securing this debate. I commend her for giving the House a much-needed opportunity to discuss the important matter of residential estate management companies in detail. I thank her for so clearly highlighting the pertinent issues in her opening remarks. I also thank all the other hon. Members who have spoken for the insight they have provided. I assure them that I well understand the strength of feeling when it comes to this issue. The debate as a whole has not only underscored the case for acting to tackle the problems associated with freehold estate management arrangements, but highlighted that those problems take various forms. Part of the challenge facing the Government, and why we believe appropriate consultation in this area is essential, is ensuring that the interventions we make in due course capture the diversity of models and challenges. We have covered a large range of specific issues today. I will address as many as I can in my response. We have also strayed into leasehold and commonhold. The White Paper is very distinct from the freehold estate issues that the majority of hon. Members have spoken about today and on which I will therefore mainly focus my remarks. The Government estimate that there may now be as many as 1.75 million homes on privately managed estates in England, although I must make clear that not all of them are liable to pay charges. As the debate has made abundantly clear, the prevalence of such freehold estates creates a wide range of problems—problems that, not least as a result of the dogged campaigning by groups such as the National Leasehold Campaign and the Home Owners Rights Network, are now well known and well understood by the public. Historically, any given local authority and water company would adopt the respective parts of a new residential estate. They would set clear, adoptable standards and provide oversight to ensure those were delivered, but more recently, and especially over the past 10 to 15 years, we have witnessed the growth of private management arrangements, where shared infrastructure, amenities and open spaces are not adopted and responsibility for the costs of ongoing maintenance instead falls on the residents of the estate through an estate rent charge, which residents pay in addition to council tax. The infrastructure and amenities provided on these estates all too often do not meet the minimum standards for adoption. In the worst cases, residents are left living in unfinished and sometimes dangerous developments. The problem of unfinished housing developments is obviously not confined to freehold estates, and part of the answer is the proper enforcement of planning obligations, but private management models clearly exacerbate the problems faced by many homeowners in this scenario by leaving them liable for the upkeep of the partially completed or unfinished infrastructure. That is just one of the many problems that residential freeholders living on freehold estates across the country are struggling with. Others include poor service and abuse at the hands of unscrupulous managing agents—we have heard many such examples in the debate today—as well as limited to no transparency about how the charges they pay are spent, onerous restrictions placed on the title deeds of their properties, and a general lack of control over how their estate is managed. These problems are more acute in some cases than others. For example, the absence of any measure of control is most acute in the case of the approximately 20% of freehold estates that have what is known as an embedded management company set in the title deeds of the relevant properties. To take another example, the challenges associated with opaque fees are magnified in estates where management arrangements are fragmented, with more than one managing company; residents have to navigate multiple companies, each of which levy fees for services in a way that significantly increases the potential for abuse. As many hon. Members mentioned, last year, the Competition and Markets Authority published its study into the housebuilding industry. I encourage any hon. Member who has not yet had the time to read that report in full to do so. The CMA identified the private management of public amenities on housing estates as a detriment to consumers and concluded that “the root cause of the aggregate detriment…is the decrease in levels of adoption of amenities by relevant authorities”. The Government agree with the CMA’s conclusion that the housebuilding market is not delivering for consumers and has consistently failed to do so over successive decades. As hon. Members will be aware, the report made a number of recommendations to Government and we published a response in full. It called for measures to strengthen protection for existing homeowners, as well as for the Government to mandate adoption of all new estates and to implement common adoptable standards for infrastructure. The Government have accepted many of the recommendations in principle, but we recognise that further work is required in a number of areas. In the immediate term, we need to introduce protections for residential freeholders on already constructed freehold estates. As hon. Members mentioned many times, part 5 of the Leasehold and Freehold Reform Act 2004 contains powers to establish a regulatory framework that to provide such protections, including the provision of standardised demands and an annual report; giving homeowners the right to challenge the reasonableness of charges levied; requiring estate managers to consult homeowners where the anticipated costs exceed an appropriate amount; and giving residential freeholders the right to apply to a tribunal to appoint a manager in the event of serious management failure. Taken together, these measures will vastly improve the situation for many residential freeholders, improving transparency and driving accountability among estate management companies. As I set out in my written ministerial statement last November, the Government recognise the importance of acting as quickly as is feasible to implement these provisions, but the establishment of a new regulatory framework through detailed secondary legislation requires us to grapple with a range of technical questions. It is important that we carry out appropriate consultation to make sure that the new system operates effectively and to the lasting benefit of residential freeholders.

The Minister is setting out a thorough analysis of the challenge that he faces. Could he say something about the distinction between existing entities and those that are yet to be set up? One of the concerns is that the Government’s legislation will not deal fully with existing arrangements, and that the none of the cases that we have heard about today will get redress from the Government’s intervention.

To be clear, the protections we are talking about, which we intend to switch on as soon as is feasible and were provided for by powers under the Leasehold and Freehold Reform Act passed by the previous Government, will benefit existing residential freeholders on existing estates. I will come to the prevalence of those arrangements in due course, but I can reassure hon. Members that we intend to carry out that consultation this year, as promised, and that I am doing everything I can to expedite it. Beyond the short-term need to protect residential freeholders better, we have to take steps to reduce the prevalence of private estate management arrangements, which are the root cause of the problems we are considering today. In my written ministerial statement, I committed the Government to consulting on legislative and policy options to achieve that objective. I hope that hon. Members appreciate that this is not a simple and straightforward area of policy and that the implications of policy choices are potentially far-reaching.

Will the Minister give way?

Yes. I will try to give way to as many hon. Members as I can.

I want to make a point about solicitors’ practices and what information people get when they buy their properties. I think that a number of people go into these contracts under false pretences and do not fully understand what they are responsible for and what they may end up paying for.

There are undoubtedly issues around the purchase of homes on these estates. For example, it appears to be fairly common for residential freeholders not to be notified of their future liability for charges early in the conveyancing process. We are giving due consideration to those issues as well. On the prevalence of future arrangements, the Government intend to seek views from a wide range of interested parties, including local authorities, management companies, developers and residential freeholders themselves. Our consultation will need to consider a wide range of trade-offs, including costs to homeowners, costs to local authorities, potential impacts on housing supply and the links with the planning system. As promised, we will consult on that matter this year.

Hon. Members have referred to opting out—in other words, if someone is unhappy with their management company, they can opt for another one. Would the Minister consider that, and would it be considered in the discussions he has with the Northern Ireland Assembly and the pertinent Minister?

Given the time available to me, I will have a separate conversation with the hon. Gentleman outside. Before I conclude, I want to touch on the issue of managing agents, whose performance can present significant challenges, whether they are chosen by residents or employed by developers. Managing agents perform a critical role in managing and maintaining freehold estates as well as leasehold buildings, and the Government are determined to raise standards among them and drive out abuse and poor service at the hands of unscrupulous agents. We remain fully committed to strengthening the regulation of managing agents of leasehold properties and estate managers of freehold estates. We are looking again at the report published in 2019 by the regulation of property agents working group chaired by Lord Best. At a minimum, we believe that the regulation of managing agents should include mandatory professional qualifications. That will apply whether the agent manages a building or an estate. We will consult on the detail of that matter this year and remain committed to publishing a draft leasehold and commonhold reform Bill in the second half of this year to provide for enhanced scrutiny on the part of Parliament. I again thank the hon. Member for South Devon for securing the debate and all those who have taken part in it. The Government intend to act, and act decisively, to protect residential freeholders on freehold estates and to reduce the prevalence of these arrangements over the long term. I look forward to ongoing engagement with hon. Members on all sides of the House—I welcome the shadow Minister’s invitation to that end—through both the forthcoming formal statutory consultations and more informal engagement across the House to ensure that we reform the system to the lasting benefit of affected homeowners.

12:58:00

I will be very quick as we are short of time. I thank all hon. Members for coming and sharing their experiences. It is clear that there is a strong feeling in the House that we need to act and that millions of people are being badly served by estate management companies. It is good to hear that looking at the behaviour of estate management companies, as well as the position of leaseholders and freeholders, is on the Government’s agenda. I appreciate that this is a complicated area of legislation; the Minister laid that out clearly. We are willing to work across the House to reach some sensible steps forward in legislation so that there can be redress for people who have until now been badly affected by estate management companies and so that the practice ends forthwith. Question put and agreed to. Resolved, That this House has considered residential estate management companies.