The profits of the top five UK house builders have risen by 388% in the last five years, sometimes at the expense of the people we are trying to help on to the housing ladder. One area in which developers’ profits have come first is commuted sums for grounds maintenance and other communal services. It seems that the idea of a developer paying the local authority a commuted sum to cut the grass and maintain common parts has had its day, and I am not clear whether the blame for that lies with local authorities asking for too much money, or developers not being prepared to cough up the funds in advance. I suspect they would blame each other.
The net effect is that more and more homeowners are having to pay twice for the maintenance of open spaces: once through a management fee; and once through their council tax. Of course, council tax pays for a lot of things, but something as visible and obvious as grounds maintenance leads people to ask why they face a double whammy. My suspicion is that if developers can save themselves half a million pounds, they have a big temptation to cash that and let the customer pay further down the line.
Not only is there a double payment, but the system is inefficient and lacks accountability. If the grass does not get cut on the verges in most parts of my constituency, either a local councillor or I will hear about it and respond, but it is not so easy to get a response when dealing with a private company.
The most high-profile example of how developers shift costs on to consumers is the leasehold scandal. How much have developers pocketed over recent years by selling the freeholds for new estates to investment companies? I hope the message is now getting through to them that that racket has to stop and that they will be ultimately be responsible for their misdemeanours. I am pleased that Ministers have indicated a willingness to act, although I am sure that they are aware of the frustration felt by many who are trapped in unsellable homes, for whom the Law Commission report feels like a lifetime away.
I know that developers have effectively been put on notice that they should not sell any more houses on a leasehold basis, but there are reports that that is still happening. Can the Government issue supplementary planning guidance to local authorities to say that selling properties on a leasehold basis unnecessarily would be a reasonable ground for refusing planning permission?
Members will have heard countless stories about leasehold and an industry that is out of control. Now is not the time to recount those, but suffice it to say that although there are some positive examples of responsible developers, I have little confidence overall that the industry has the right moral structures in place to deliver the houses that we so desperately need. We need answers to how these feudalistic practices were allowed to start in the first place.