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Oct 2006

Letting Options        Those that have bought their Council house face huge bills

EX-Local Authority properties (XLA) are a cheaper alternative to privately constructed properties and very often their larger room sizes and hallways make them a favourite for private letting, and first time buyers, but recent changes threaten their place in the market.

Who cares? Well, anyone who owns or is thinking of buying an ex-local authority property, will need to be aware of what is happening.

Most British Premiers have something with which to be remembered.  Churchill had the war and a bit about ‘fighting on beaches’.  Eden had Suez, Edward Heath fell off a boat, Harold Wilson commissioned the Open University, Blair has his ‘hand of history’ that he is so fond of, and, of course, Iraq and Afghanistan – but Maggie Thatcher had the ‘Right-to Buy’ (RTB) (as well as the Falklands, the destruction of the Unions, the failed IMF and a blue rinse hairdo – but please, one issue at a time.)

Yes, the ‘Right’ for those poor, down-trodden, lower strata, ‘Mick’ and ‘Julies’ to buy their Council flat or house and thereby stride out into the busy, choice-laden, logo-filled, foreign holiday-having, world of capitalism – bless them, they deserve a chance!

Well that was the sales pitch, but in effect the right to buy did empower many council tenants to enter the property market and take further steps from there.

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Let me explain for those unfamiliar with this scheme (where have you been?)…The Government gave you the ‘right to buy’ your council property at a discounted rate, as long as you were a council tenant for at least 2 years.  Early on in the scheme, the discounts were generous to say the least; people buying a four bed for the price of a studio flat was not uncommon, although, discounts have now been curtailed since those heady days.  The only ‘fly in the ointment’ was the local Borough Council.

Where the expanse of council property lay (large estates etc), many (most?) were Labour run Councils, who were socialists back then, who vehemently opposed the RTB as a capitalist sell-off of Britain’s welfare ideals that would be followed by the demise of the Health Service, ‘Lollipop men’ and all other state-sponsored social appendages.  As the freeholder, they sought to dampen enthusiasm by placing high service charges and costs on the properties for those who became leaseholders.  It was common to have ever-rising service charges and to receive huge bills for minor works on the estate.

Needless to say, when people were getting massive discounts, they were unconcerned by the high service charges and life went on, but now, there has been a new resurgence in the Council’s interest in their leaseholders, that is putting a whole new spin on things.

A recent European Union directive (here we go again!) has declared that all local authority property should be brought up to a standard of ‘Good’, as defined by whoever wishes to define ‘good’.  So our Government and local Councils have seen fit to embark on a program of ‘improvements’ to their freeholds that will bring the standard up to ‘Good’ – are you still with me?

Great! Everywhere is getting painted?….wrong! 

Those fortunate, or otherwise, to be a Council leaseholder are now receiving bills for ‘necessary’ works to improve their property, starting with the things that cost the Council money – communal heating systems are going and task-specific companies have been set up to take over basic services including parking, cleaning and repairs.

Case 1

I have a colleague who is to be billed for a flash new entry-phone system that will not be fitted to his block, but to other properties on the same estate.  When he enquired why he was being billed for something that was not being added to his property, he was told that as a leaseholder he had to pay a share whether he was getting a direct benefit or not.

Case 2

Landlord renting out his XLA property asks for 2 years if he can fit his own boiler instead of the Council communal heating which turns itself off in May and comes back on in October.  Council refuses.  Then, ‘out of the blue’, the said Landlord is given four months notice that the communal boiler is being removed and all leaseholders are required to fit their own boilers.  Council quotes £5000+ if they fit the new boiler, but cannot quote exactly, as they do not know how much profit they require and will give the final bill some months after completion – absolutely true! This meant the landlord could receive a bill for £8000 and would have no alternative but to pay – instead he arranged the work himself at a cost of £1200.

   
   
   
     
     
     
     
     
     
     
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
           
     

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