Labour’s next manifesto: Seema Malhotra on a new deal for leaseholders
We asked five Labour backbenchers to make the case for a policy they would like to see in the party’s next programme for government. Seema Malhotra says her party must grasp the nettle and pave the way for a new deal for leaseholders before it is too late.
The crisis we face in terms of providing affordable housing for current and future families is real. There is now an increasing political focus on the provision of new housing as local authorities struggle with waiting lists and thousands of families struggle to get a place they can genuinely call home.
A decent home is the basic foundation to raise families with the best chance in life – a base from which to build dreams and aspirations. Labour has pledged that by the end of the next parliament, we will be building at least 100,000 council and housing association homes a year for genuinely affordable rent or sale. This was a policy that resonated hugely in my constituency in the election last year. Whatever the Tories say – their record stands for itself – the number of home-owning households has fallen by 900,000 for the under-45s since 2010.
It’s also right that Labour will establish a new Department for Housing – tasked with improving the number, standards and affordability of homes. But in addition – we need a new deal for leaseholders.
Over the last year, I have been conducting a review of leasehold issues – with a range of leaseholders within residential blocks in my constituency independently contacting me regarding the level of service charge that has been set and the standard of work that is being provided by the social landlords. All too often, poorly written leases and the lack of power for any comeback is turning a dream home into a poverty trap. Shared ownership has become a vehicle through which leaseholders are paying huge service charges for poor delivery and with little transparency of costs.
Earlier this year, along with other MPs, I held a roundtable in parliament with around 50 leaseholders from across London from a range of locations and housing associations. A selection of quotations from the roundtable illustrates the range of issues: “We are used as cash cows, they do as little maintenance as possible. You have to force them to do the maintenance.” “I pay for communal areas which I have no access.” “The service charge has massively increased since its initial amount. I am due to be evicted next week as I cannot afford the increased amount I am now having to pay.” “They are very aggressive and intimidating.”
Shared ownership schemes are likely to increase as part of plans to build more affordable low cost or intermediate homes but without reforms and greater protections, we are creating the circumstances for a serious growing crisis in the system.
Firstly, there is a lack of clarity in relation to liabilities. With shared ownership schemes, the boundaries of liability between the landlord and the home owner can be unclear. This grey area often results in a disproportionate share of costs repairs or other works being passed on by the social landlord, sometimes to the tune of thousands of pounds and sometimes at short notice.
Secondly, there is no protection from scale of charges – no cap on the level of charges that can be passed on.
Thirdly, I have been shocked at the lack of transparency of charges, of service level agreements and of the reasonableness of costs that residents have experienced. There are real concerns around double counting, overcharging and non-delivery of services which residents are still being charged for.
Fourthly, limited redress if customer service is poor. On very basic matters of customer service around service charges, maintenance and day to day repairs, residents are often having to wait months or years for issues to be addressed.
Fifthly - limited recognition of leaseholder rights to information. In a dispute, even when leaseholders exercise their statutory rights to request information from the landlord about what is being charged, this information is not being sufficiently provided. Based on the evidence I have seen, requests for information result in at best, limited and incomplete information being provided by the social landlord or at worst, a lack of responsiveness coupled with aggressive further demands for payment.
Many of my constituents affected are young families or first-time buyers just making ends meet. Ongoing battles often for years with their social landlord, soaring service charges and unpredictability of costs can result in leaseholders becoming trapped in debt with enormous strain on their family and quality of life. Exercising the option of taking the social landlord to court is stressful, time consuming and costly for leaseholders.
Urgent action is needed on the regulations and means of redress around service charges, clarity around liabilities, transparency around what is put into a lease, better defined service standards, and a more effective enforcement and complaints procedure for when things go wrong. There should also be a further tightening of the law on the rights of social landlords to claim back legal fees in cases where leaseholders take them to court and the social landlord loses the case.
We all recognise there is an urgent need for more affordable housing and good models of shared ownership are vital. The unethical practices we are seeing are letting everyone down and reducing confidence and trust.
The need for reform is urgent – to leave the behaviour particularly of large social housing associations unchecked could well lead to increasing housing affordability issues and leaseholder poverty particularly in the case of those who are “just about managing.” Labour needs to grasp this nettle – and pave the way for a new deal for leaseholders before it is too late.
Seema Malhotra is Labour MP for Feltham and Heston
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