As a leaseholder , I find the Government’s failure to end leasehold sad.
I don’t have Harry Scoffin’s energy or his charm but I am a London leaseholder who is pretty fed up.
There is some interesting information floating about, this from “My London” that backs up Harry and my headline!
City Hall will launch a probe into how high service charges are impacting London’s housing crisis, the Local Democracy Reporting Service (LDRS) can reveal.
The Greater London Authority (GLA) has reached out to members of the London Housing Panel to start work on a research document looking at service charges in relation to the affordability of new homes across London.
More than a third of housing stock in London – 36.1 per cent – is leasehold, meaning property owners are liable to pay service charges imposed by freeholders. Londoners are more than twice as likely as the rest of the country to be leaseholders.
Now the 15 members of the London Housing Panel, which is funded by the GLA and Trust for London, have been asked for their initial feedback on the “cost and implications of service charges across all housing tenures”, according to an email seen by the LDRS.
Reporting to Deborah Halling, Senior Policy Officer from Housing & Land at the GLA, the engagement session was billed as an “early stage conversation” ahead of a wider research piece, which has the potential to inform policy decisions in future.
Members were told that the “GLA is aware that high service charges may leave existing and prospective tenants and leaseholders struggling to afford homes, including affordable homes, and that, where it is expensive to provide services, developers and providers may be wary of building homes, because they’re concerned high service charges will dampen demand for the homes”.
The email added: “Given this, the GLA plans to do some work to better understand service charges for homes in London, including how they vary by tenure and type of home, the extent to which they’ve increased in recent years, and the main factors that determine service charges.
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This continues to muddle two quite separate things. Ground rent is levied by freeholders simply because they own the land. They provide no services. Service changes are levied by the management organisation for the development and that organisation is very often not the freeholder. Service changes are to pay for services provided for the whole development, like buildings insurance, cleaning and re-decoration of common parts, buildings repairs, grounds maintenance, lift maintenance and any concierge etc. facilities. They are very much influenced by building design and construction.
If only the leaseholders had control of the service companies they find themselves having to use! Many of them are “useless”.
Many leaseholders do have control of the service companies and have done so for many years. I was the chair of the service company for the block of flats I was in during the 1980s. The only shareholders of that company were the leaseholders. There were Landlord and Tenant Acts passed in the 1980s that required service charges to be reasonable.
Leaseholders taking control of the management organisation isn’t a sure way on getting a large reduction in the service charge. The leaseholders exercised their right to take over the management of my mother’s retirement housing development whilst she was there. It didn’t produce much of a reduction in service charges and had some dubious changes, like converting the communal washing machines to a pay as you go basis rather than being covered in the service charge. The inherent costs from the building design and lease obligations stayed the same.