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

Voices
Homeless Veterans charity auction: Cook with Angela Hartnett and Neil Borthwick at Merchants Tavern
charity appeal
Sport
Amir Khan is engaged in a broader battle than attempting to win a fight with Floyd Mayweather
boxing Boxer Amir Khan will travel to Pakistan in bid to 'make a difference' in the wake of army school massacre
Arts and Entertainment
Strictly finalists Simon Webbe, Caroline Flack, Mark Wright and Frankie Bridge
tvLive: Simon Webbe, Caroline Flack, Mark Wright and Frankie Bridge face-off in the final
Sport
Ched Evans in action for Sheffield United in 2012
footballRonnie Moore says 'he's served his time and the boy wants to play football'
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

    Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

    $200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

    Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

    $125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

    Sheridan Maine: Commercial Finance Manager

    Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Sheridan Maine: Regulatory Reporting Accountant

    Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Day In a Page

    Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

    Amir Khan attacks the Taliban

    'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
    Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Could cannabis oil reverse the effects of cancer?

    Could cannabis oil reverse effects of cancer?

    As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
    The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

    The Interview movie review

    You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
    Serial mania has propelled podcasts into the cultural mainstream

    How podcasts became mainstream

    People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
    Jesus Christ has become an unlikely pin-up for hipster marketing companies

    Jesus Christ has become an unlikely pin-up

    Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
    Rosetta space mission voted most important scientific breakthrough of 2014

    A memorable year for science – if not for mice

    The most important scientific breakthroughs of 2014
    Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

    Christmas cocktails to make you merry

    Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
    5 best activity trackers

    Fitness technology: 5 best activity trackers

    Up the ante in your regimen and change the habits of a lifetime with this wearable tech
    Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

    Paul Scholes column

    It's a little-known fact, but I have played one of the seven dwarves
    Fifa's travelling circus once again steals limelight from real stars

    Fifa's travelling circus once again steals limelight from real stars

    Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
    Frank Warren column: 2014 – boxing is back and winning new fans

    Frank Warren: Boxing is back and winning new fans

    2014 proves it's now one of sport's biggest hitters again
    Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

    Jeb Bush vs Hillary Clinton

    Karen Tumulty explores the power dynamics of the two first families
    Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

    Stockholm is rivalling Silicon Valley

    The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
    Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

    Crucified Santa: Urban myth refuses to die

    The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture