Decent homes not cause of high bills
The government's £18 billion housing refurbishment programme has been cleared of driving up the number of leaseholders facing huge service charge bills.
Research by the University of Birmingham has concluded that the Department for Communities and Local
Government's decent homes policy has only led to a ‘modest' number of leaseholders being handed high bills.
The claim is being contested by leaseholder lobby groups, which say they are seeing increasing numbers of people seeking advice on how to deal with bills up to £50,000.
The report, obtained by Inside Housing under the Freedom of Information Act, predicts that leaseholder service charge bills are likely to reach an average of £11,000 by the 2010 decent homes deadline.
Most large service charge bills were the result of landlords' attempts to catch up on their backlogs of repairs, the report stated. ‘The decent homes policy and some other regeneration activities have been the catalyst in enabling local authorities to address the backlog of disrepair,' it states.
The researchers also acknowledge that previous poor practice among social landlords had led to a culture of mistrust between leaseholders and their council and housing association lessees.
‘The evidence that we have obtained suggests that average bills are well below £10,000 in most cases. ‘There are however a small number of leaseholders who are faced with bills in excess of £10,000,' it stated. ‘The number who are faced with hardship as a result of these high bills is modest.
‘Although leasehold management is now more systematic and professional, there is a considerable legacy of distrust among some leaseholders.
‘Practice in the past has not always been of the highest standard and there is an assumption by some leaseholders that it is not any better today.'
The researchers suggested that the government should issue more guidance to ensure that social landlords are geared up to help leaseholders facing hardship from hefty bills.
John Paterson, a member of the London Leaseholder Network, said he was unconvinced by the report's findings. Leaseholders in the capital in at least two boroughs were facing bills in excess of £50,000. ‘The report was commissioned by government and reflects the views of government,' he said.
Mr Paterson said that the report could however help leaseholders in their campaign to force landlords to put a £10,000 ceiling on repairs bills. ‘One of the solutions that has been promoted is capping,' he said. ‘If the figures [in the research] are correct then it wipes out the economic argument against capping because it will only apply to a few leaseholders.'
Andrew Coles, executive secretary at Tower Hamlets Leaseholders' Association, which runs advice surgeries for leaseholders, said the research did not accord with his experience. ‘Our impression is that there has been a significant increase in major works being carried out and a lot of bills are well in excess of £11,000. A lot of leaseholders are seeing bills in the late twenties and early thirty thousands,' he said.
A spokesperson for the DCLG said the government was reviewing ways of helping leaseholders facing financial difficulties. ‘Many councils are already using a range of powers to help leaseholders facing
financial difficulties, including allowing payment by instalments, deferring payments until the property is sold, offering equity release options, using discretionary capping powers and buying back,' he said.