OFT targets leasehold

The OFT is particularly interested to hear opinions on subjects including whether leaseholders feel they have sufficient involvement in decisions taken about appointing managing agents; whether there is effective competition, including evidence about how easy it is to switch between providers, and whether residents receive good value for money and reasonable quality of service.

Cavendish Elithorn, OFT Executive Director, said: “This market is significant, with as many as five million people living in leasehold properties. Costs can be very substantial and we have been provided with a number of examples showing significant financial impact on individual residents and the difficulty in exerting control over the process.”

The study, set to commence in early 2014, would cover services such as maintenance, cleaning or building work.

Andrew Kafkaris, Director at Bruton Street Management, welcomed the proposal, saying: “We cannot pre-empt the outcome of the study, but we have long been calling for Government to address low standards and practices in the sector that do not deliver good value for leaseholders.”

He said issues of concern include charging prices so low that they do not cover the costs of the product or service sold.

“We have a long held view that it is challenging to say the least to deliver an adequate level of service at the mean prices charged and that this inevitably leads to difficulties in providing the full contracted scope of services to the correct standard. Are short cuts made?

“Nobody can deny problems prevail in the industry. Whatever the conclusion it is important the Government takes the report seriously and acts upon its findings.”