London leaseholders lose out in management
Thousands of residential leaseholders in central London risk losing money by failing to exercise their right to manage their apartment blocks, claims surveying firm Ringley.
Self-help: Bowring assisted with residents management company at Hertford Lock House in east London.
Following an analysis of the ownership of 3,375 flats across 15 inner London postcodes, Ringley reveals that just 9.5% of residential blocks are self-managed where leaseholders can control the amount of service charge and how it is spent.
Leaseholders have been able to take over block management through enfranchisement since 2002. But Ringleys survey highlights a huge concentration of control still in the hands of a few estates, institutions and overseas owners.
Ringley suggests that London's leaseholders are either apathetic or unaware of the financial benefits of their right to manage, despite paying higher service charges than elsewhere in the UK.
Managing director Mary-Anne Bowring claims: Wealthy institutional, overseas and famous estate freeholders in prime central London are making big profits by charging a premium for management services, undertaking all too frequent upgrading of common parts and by marking up the costs such as buildings insurance.
But it is often the case that the individual flat owners don't receive the value they deserve. These leaseholders are in a position where they can initiate a change and save thousands of pounds a year, simply by increasing their involvement in the management of their building.
Ringley helped residents in Hertford Lock House, 201 Parnell Road, Tower Hamlets, east London, to set up a management company. Bowring expects more will follow as service charges come under scrutiny amid tough economic times.
Peverel, the Vincent Tchenguiz-owned housing managing group that was placed into administration last month, has come in for increasing criticism from its leaseholders over service charges.
But Peverels head of commercial Andrew Fildes told Property Weeks property management conference last week in London: Leaseholders have a responsibility to understand their obligations under the lease before purchase.
People often make property decisions while they are under both emotional and time pressures. As a result, questions such as, what will my service charge obligations be? or who is the managing agent? never get asked.
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