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- By Phil Hendry
- Senior Producer, BBC News
“I wouldn’t touch the lease and I wish I’d never done it” – words born from bitter experience by Liz Winstanley.
She bought her two-bedroom rental apartment in Manchester in 2018. When Storm Eunice hit Britain two years ago, the roof of her top-floor apartment began leaking badly.
“The rain was coming down through the outlets and switches,” he said.
Most homeowners would try to hire someone as soon as possible to identify the leaks and fix the problem through a claim on their building insurance.
But since Liz’s flat is rented, she had to rely on a managing agent to sort things out. She said after many calls and emails, the first attempt to stop the flow failed. Mold began to grow on the increasingly soggy floor.
Liz had to move; She pleaded with the managing agent, FirstPort, to find her suitable temporary accommodation, and they finally did.
“It was in a dodgy part of Salford,” Liz said. “There were parties all the time and drug use on the block. One day they found a body. I couldn’t stay there, I didn’t feel safe.”
Liz finally returned home this month.
FirstPort told the BBC it recognized residents like Liz had faced a significant challenge, but said the delays were due to the problem being more structural than initially thought and an inherent defect in the roof construction.
Poor communication, inadequate repairs and unjustified service charges are common complaints from the estimated five million people who own their properties as leasehold.
Tenancy dates back hundreds of years, before women even had the right to own property, in a time of lords and landowners, peasants and serfs. Anti-tenancy campaigners say it should be abolished, that it is feudal and unfair as it allows freeholders – who actually own the flats and some houses on which they are built – to extract money from tenants through managing agents.
The government agrees that there is injustice. Housing Secretary Michael Gove has called some of those operating in the rental sector “bandits”.
The Tenancy and Freehold (Reform) Bill is being debated in Parliament this week. The government says it will give tenants like Liz an easier and less expensive route to legal redress. It will require greater transparency to justify, but not cap, service charges charged, and will set new leases to be standard 990 years, rather than the current 99 or 125 years.
Gove rejects calls for the tenancy system to be abolished entirely, saying it is legally “tremendously complex”. He also resists suggestions that the government has bowed to lobbying by those with vested interests who benefit from the current system.
“It is essential to ensure that the space for exploitation is reduced,” says Gove. “The real challenge of abolishing tenancy in one fell swoop is the complexity of the English legal system.”
But Scotland managed to do it 20 years ago, meaning that, apart from a handful of properties in Northern Ireland, England and Wales are now the only countries in the world where leasing is still widely used.
Anti-tenancy campaigners say Gove’s legislative efforts do not go far enough.
“Renters want to have complete control over the homes they have bought, their utility costs and, ultimately, their lives,” says campaigner Harry Scoffin.
“What the government proposes is transparency about these costs. The problem is that we are going to discover how much they are scamming us, but the scams do not stop.”
Harry’s mother Anna says she feels exploited. Utility costs for her flat in London’s Canary Wharf have risen 40% in the last two years, she says, to more than £33,000 a year.
“I feel like my landlord can dip his hand into my bank account whenever he wants and the system allows him to,” Anna said.
She says some homeowners on her block have resorted to selling their flats at auction at discounted prices to avoid the charges.
Anna’s new buildings managers tell me they are carrying out a review of service charge levels alongside the building’s owner, a multi-millionaire businessman.
A leading London estate agent also suggests that the government’s efforts to reform the tenancy system for people like Liz and Anna do not go far enough.
Steven Herd of MyLondonHome.com said abolishing the leasehold agreement and replacing it with common law – a system that would allow landlords to collectively manage their own apartment blocks or appoint a managing agent of their choice – instead of the freeholder – would give to apartment owners power over their own buildings.
Herd says people, especially younger first-time buyers – who make up half of rental property purchases – are increasingly aware of the dangers of the rental system.
“People who see their service charges double without seeing an increase in service or amenities believe it’s a toxic market,” he added.
