Who is accountable in privatised Britain?

New Statesman​

5 days ago

Illustration by Andy Carter / Ikon Images
'New, unadopted estate.' The Hitchin MP, Alistair Strathern, pointed. Then he gestured to a building site where diggers were enthusiastically getting to work. 'New estate that will be unadopted… Unadopted estate… Unadopted estate.' During the 20-minute drive from Shefford town centre to Hitchin Station, we passed at least six examples of the phenomenon Strathern had invited me to his constituency, which straddles the Bedfordshire-Hertfordshire border, to explore: new-build housing estates their councils have refused to adopt.
Much has been written about leasehold, the peculiarly British 'feudal' system in which homebuyers own a property but not the land it sits on, leaving them liable for spiralling ground rent and management fees. After decades of advocacy, some improvements were made under the Conservatives in last year's Leasehold and Freehold Reform Act, and Labour has promised to go further with protections for leaseholders in this parliament.
But even when new-build homes are sold with the freehold, hidden costs can sneak in. Known as 'fleecehold' housing, the estates Strathern pointed out are those where the responsibility for maintaining the roads, street lighting, drainage and communal areas has not been adopted by the council, as it deems development not to have been completed to a high enough standard. Until a development is adopted, the residents must pay for the services the council would usually provide, in addition to council tax, via yearly fees paid to private management companies.
The fees themselves may not sound large – £200-£300 a year. Or, at least, that's the level at which they start out. At a new estate I visited, fees had been hiked by 41 per cent in a year, with vague explanations. Calls and emails to the management company went largely unanswered; correspondence was limited to scarily worded 'final demand' letters. If owners refuse to pay, management companies can go direct to their lender to have the charges added to their mortgage, tanking the owner's credit rating. Residents I met spoke of finding it impossible to determine what they were paying for, or to hold the management company accountable for the work it was – or wasn't – carrying out.
Fleecehold is now the norm across the country. Whereas councils used to adopt new estates, the Competition and Markets Authority has found that 80 per cent of new homes built by the 11 largest developers in 2021-22 were sold under the fleecehold system, with £260m in estate management charges paid out in 2022 alone. There are stories of owners being assured their estate would be adopted as a formality, only to still be paying fees a decade on. Meanwhile, the government is pushing through planning reform to meet its target of 1.5 million new homes by the end of this parliament.
The problem may not be as visceral as the issues with build quality that owners of new-builds often face: cracked walls, dodgy plumbing, damp and mould. But the two are inextricably linked. Every owner I spoke to about fleecehold charges also had a horror story of how their 'dream home' had turned into a nightmare of construction faults that developers were reluctant to rectify. One showed me a brimming lever-arch folder of his correspondence with the developer – 200 pages in 20 months.
The question is one of accountability. When things go wrong, whose job is it to fix them? What happens if they fail to do so? And how are they seemingly able to charge what they like, with no cap on costs or any obligation to show how the money is spent?
Subscribe to The New Statesman today from only £8.99 per month Subscribe
You might imagine the council would step in. But, as I found out in Hitchin, cash-strapped local authorities have little incentive to ensure developments are built to standard, as adopting them means adopting additional costs. The developers, meanwhile, have little incentive to come back to complete repairs once the houses have been sold. Strathern, who worked on the Leasehold and Freehold Reform Bill committee, is hoping to change this and has introduced a debate in parliament on ensuring new estates are adopted on schedule. But it's hard to fix a problem most people don't even know exists until after they've bought their homes.
Passing the accountability buck can be an art form. In Shefford, I visited Old Bridge Way: a 220m stretch of road through an industrial park connecting an estate of some 1,000 homes to the centre of town and a Morrisons. I stood there for ten minutes watching non-stop traffic navigate a maze of potholes six inches deep. Central Bedfordshire Council says this is not its responsibility, as it doesn't actually own that part of the road. Who does own it is an open question: the company responsible for it was liquidated in 2024, leaving it effectively ownerless. But I noticed double yellow lines along the kerbside. I asked the council if it was issuing parking fines for a road it claimed it had no responsibility for, but it did not offer an answer.
A council that won't adopt a thoroughfare used by thousands of people is unlikely to adopt estates full of new homes. Strathern described both situations as 'hollowed-out councils retreating from the public realm'. To me, they resembled what the satirical science-fiction author Douglas Adams once termed a Somebody Else's Problem field, a way of concealing inconvenient things that utilises 'people's natural predisposition not to see anything they don't want to, weren't expecting, or can't explain'. For residents placed in fleecehold limbo the issues of rising fees and the lack of accountability are impossible to ignore. For everyone else, they are Somebody Else's Problem.
[See also: GMB chief Gary Smith: 'Oil and gas is not the enemy']
Related