Emma Lunn: Shame on Wandle Housing - the not-for-profit association that gazumped its own buyers

 

Selling property can often bring out the worst in people and the subject of "gazumping" – demanding more cash from a buyer after an offer is accepted but before contracts are exchanged – tends to get people's hackles up.

Those who have been victims of such a practice, myself included, criticise it as unethical and immoral. However, vendors find they can mostly live with a slight feeling of shame if it means an extra £10,000 or £20,000 in their bank account.

But, while private sellers are one thing, and have their own motives, you'd think a not-for-profit housing association might act differently. Well, apparently not.

Last week saw Wandle Housing Association – funded by the state – forced into an embarrassing U-turn after it attempted to gazump its own customers by hiking the price of flats it had agreed to sell on a shared ownership basis to first-time buyers.

Dozens of keen buyers had paid £500 deposits for flats in the Streatham Hub development in South London and were waiting for the deals to be completed. But with some buyers expecting to move in within a matter of weeks, Wandle Housing moved the goalposts and upped the flats' prices by up to £150,000 in some cases. This put the properties well out of reach of the people the association is supposed to help.

It attempted to justify its actions by telling the distraught buyers that there were "significant changes in the London property market which are beyond our control". Roughly translated this meant "with house prices in London on the up, we realised we could get a load more cash for these flats".

After all, the cost of building the flats won't have suddenly gone up – the move was simple profiteering.

When devastated buyers went to the press with their story of woe, Wandle realised, lo and behold, that it could stick to the original price after all.

So, all's well that ends well, right? I'm not so sure. I'm sceptical about both shared ownership and the current laws around leasehold flats – and the flats at Streatham Hub are being sold on a leasehold basis.

"Owning" a leasehold flat means you buy the right to live in a property for a set period – usually 99 or 125 years – rather than owning the land it stands on. The land is owned by a freeholder or landlord who is responsible for the upkeep of the communal parts of the building such as staircases, roofs and gardens. But although the freeholder decides what maintenance work should be done and by whom, it's the leaseholders who pay.

The rules mean corrupt freeholders can charge leaseholders over the odds for services – and many freeholders do just that. For this reason, disputes between leaseholders and freeholders are common.

Most flats across the country are owned on a leasehold basis with the alternatives, share-of-freehold or commonhold, being relatively rare.

Presuming Wandle retains the freehold of the Streatham Hub, the new owners of the flats will be stuck in a long, one-sided relationship with an organisation that's already shown its true colours. What can possibly go wrong?

The perils of leasehold ownership are further demonstrated by a case just down the road in Brixton.

In theory it should be simple for leaseholders to take over the running of their building by exercising their "right to manage" or RTM. However, in reality this can be a far from simple process, with freeholders often doing their best to derail proceedings while residents face rising legal bills in the process – they have to pay the freeholder's legal costs as well as their own.

Residents at Brixton Hill Court are battling for their RTM even though their first attempt to break free of freeholder Springquote resulted in an £18,000 legal bill – reduced from an initial demand of more than £42,000 – and their RTM was rejected on a technicality.

Streatham MP Chuka Umunna, the shadow Business Secretary, has waded into the case, promising the residents his full backing. And so he should – this is exactly the sort of issue MPs ought to tackle on behalf of constituents.

Flat owners in the 1930s-built block of 143 flats have already taken Springquote to a tribunal in June and July last year. Another hearing followed in January.

The group's solicitor, James Compton, argued that the cost demands were being used to intimidate the leaseholders to get them to drop their RTM claim, and I suspect he's right. Freeholders and managing agents routinely use bullying tactics to frighten leaseholders – something which must be stamped out.

Twitter: @emmalunn

PROMOTED VIDEO
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Software Development Manager

    £40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

    Ashdown Group: Product Manager - (Product Marketing, Financial Services)

    £30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

    Recruitment Genius: Compliance Assistant

    £13000 per annum: Recruitment Genius: This Pension Specialist was established ...

    Ashdown Group: Market Research Executive

    £23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

    Day In a Page

    Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

    Isis hostage crisis

    The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
    Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

    The runaway buccaneers and the ship full of gold

    Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Maverick artist Grayson Perry backs our campaign
    Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

    Assisted Dying Bill: 'I want control of my life'

    This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
    Move over, kale - cabbage is the new rising star

    Cabbage is king again

    Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
    11 best winter skin treats

    Give your moisturiser a helping hand: 11 best winter skin treats

    Get an extra boost of nourishment from one of these hard-working products
    Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

    Paul Scholes column

    The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
    Frank Warren column: No cigar, but pots of money: here come the Cubans

    Frank Warren's Ringside

    No cigar, but pots of money: here come the Cubans
    Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

    Isis stands strong as its numerous enemies fail to find a common plan to defeat it

    The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

    Virtual reality: Seeing is believing

    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
    Homeless Veterans appeal: MP says Coalition ‘not doing enough’

    Homeless Veterans appeal

    MP says Coalition ‘not doing enough’ to help
    Larry David, Steve Coogan and other comedians share stories of depression in new documentary

    Comedians share stories of depression

    The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
    Has The Archers lost the plot with it's spicy storylines?

    Has The Archers lost the plot?

    A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
    English Heritage adds 14 post-war office buildings to its protected lists

    14 office buildings added to protected lists

    Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Scientists unearthed the cranial fragments from Manot Cave in West Galilee