Housing for older people inquiry – new CLG Committee continues inquiry

The FPRA have made a submission to the Housing for older people inquiry (further information  here)

6 October 2017

Communities and Local Government Committee Housing for older people

Housing for older people inquiry – new CLG Committee continues inquiry

Dear Sirs

Thank you for the opportunity of making a submission to your committee.

This organisation which has been established 45 years is the national body that represents the interest of long leaseholders in England and Wales which we do via their Resident Associations, Resident Management Companies, Flat Management Companies, Right to Manage Companies and similar groups.

From the very list above we hope you will immediately appreciate the complexity and difficulty of the leasehold sector generally and the added problems this brings to the retirement sector.

We have approximately 500 member groups each of whom then represents many individuals, with many in the retirement sector and receive a great number of questions from our members about the difficulties of communal living.

It is clear that many older people appreciate the security and provision provided by retirement blocks, and this area should be a serious focus for the provision of homes for older people.

It is also clear that a major barrier to older people moving into retirement blocks and the experience of those people that are in retirement blocks is the adverse effect of failures in protecting those people adequately from the financial and administrative burdens involved in leasehold.

We are not in a position in this short submission to detail all the problems with the retirement leasehold sector, but would urge your committee to coordinate and take into account the work already done, but far from completed by the Competitions and Markets Authority.  We would also refer you to the report of the All Party Parliamentary Group on leasehold jointly chaired by Sir Peter Bottomley and Jim Fitzpatrick MP.

The Department of Communities and Local Government have recently been consulting on changes to leasehold law and this organisation has made submissions to these and other consultations.

What is needed is several key things:

  1. Law Reform – Leasehold law is unnecessary fragmented and complicated with far too many court cases over interpretation.  Indeed it is so complex that many in the legal profession do not understand it let alone, an older person in or seeking to be in retired accommodation.
  2. Taking Control – There are significant rights which we have campaigned for and succeeded with over the management and ownership of leasehold properties. These however, do not address some of the fundamental problems facing older people in dealing with the day to day issues they face.  The solution as used in practically every other country in the world is ‘Commonhold’ (which does have other names).  This lays out a single structure and protection and all new retirement properties (and for that matter all new communal properties) should be sold under this system and existing ones converted without the need as at present of a 100% vote.
  3. Protection of Leaseholders Money – Many of the funds paid by retired people to third party managers are effectively unprotected.  Over £1 billion of sinking funds, reserve funds, service charges and several other names have no protection and the Financial Conduct Authority repeatedly says there is no legislative base to protect the funds and/or they have no instruction from the Treasury.  The importance of this for older people stressed enough as by the very nature of the people they are aware that if they lose their savings they have no opportunity to replace them.
  4. Energy Efficiency – Many older people feel the cold as well as having some financial challenges of paying for utilities.  Most energy efficient measures exclude provision to those living in leasehold flats.  Whilst accepting there are practical issues to be dealt with, if there were the political will they could be addressed and this organisation has joined with others to the Fuel Poverty Coalition to campaign for this.
  5. Disability Issues – Many people as they get older have disability issues and whilst we welcomed and contributed to legislation over disability rights, legislators have failed to appreciate that the common parts of a block of flats are not the same as those in an individual house.
  6. Parking Issues – Mobility can be an issue and parking both authorised and illegal can be a barrier.  For example: An older person wanting to move from a house to a flat might still require their car or mobility vehicle but not then have a suitable place for it.  We are working with other organisations to look at the impact of illegal parking.
  7. Lifetime leases – We have recently become aware of abuses involving older people where they are being possibly misled into buying houses or flats on a new type of ‘lifetime lease’ avoiding much of the protection of legislation that is in place.  We have separately written to the Secretary of State on 3 July 2017 and in the reply it was stated ‘this practice is not technically illegal, but exposes a gulf between the letter of the law and the spirit of the law’.  We agree with this sentiment no only over ‘lifetime leases’ but many other aspects of the law as it effects older people.  We hope you will address this issue.

 

Conclusion

  1. The adequacy of provision for homes for older people has a major barrier in place because of the failures of leasehold law.
  2. The opportunity for older people to downsize to retirement flats is being lost and as a result additional care costs and support are required in what are effectively no longer suitable homes.
  3. Retirement flats are in concept an excellent idea giving support and appropriate size and designed homes.  The take up and the provision is let down by the reality.
  4. We have identified well over 50 separate areas of legislation which have impacted on the leasehold sector.  The solution is to abolish the leasehold sector and replace it with ‘Commonhold’ which while not a panacea to everything would be a very good start but currently lacks the political will and of course the many vested interests and well financed groups that profit from the current situation fight hard against.
  5. We believe that the government and many sectors could save substantial amounts of money if this ‘mess’ were properly sorted out.  This includes savings in benefit because there are many who are income poor but asset rich in older age.
  6. We would support a national strategy that took into account the above.

This organisation is run by volunteers with a tiny budget and very limited resources, but nevertheless hopes that you understand the voice we represent is of major importance to your committee, and we hope will be not only considered but acted upon.

Presented by Bob Smytherman, Honorary Chairman on behalf of FPRA

October 2017