Outrage as residents in England’s ‘affordable’ housing forced to pay thousands of pounds extra in service charge | Housing

Some of the UK’s largest housing providers have dramatically increased annual service charges by thousands of pounds, plunging residents into financial crisis, an Observer investigation has found.

Many residents who bought shared-ownership properties built as affordable homes have been sent bills in recent weeks with increases of more than 40%. Some say they are unable to sell the properties having now been lumbered with “extortionate” charges and no cap on future increases. More than 1,000 people across the country are now threatening to refuse to pay.

In most cases analysed by the Observer, residents say they have not been given detailed evidence to support the sharp rise in service charges. Many in shared-ownership homes say service charges are now higher than their rents, with one expert warning a parliamentary inquiry that the rises are “often uncontrollable”.

The investigation places more pressure on the housing secretary, Michael Gove, who has been forced to water down his plans for leasehold reform in a bill going through parliament. A spokesperson for Gove told the Observer that “increases in service charges without proper justification are completely unacceptable” but that the government’s new bill would “strengthen protection for leaseholders”.

The housing ombudsman, Richard Blakeway, warned this weekend that there may need to be a “fundamental rethink” of how shared-ownership schemes, which are intended to give people their first step on the housing ladder, operate.

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Suzanne Muna, from the Social Housing Action Campaign, said: “These are extortionate demands beyond anything which seems reasonable, and bear no resemblance to the services provided. There is widespread service-charge abuse.

“Residents can’t move because potential buyers are not going to want to buy properties with these service charges.” She said many residents were striking over the alleged abuse and called for ministers to intervene.

Labour MP Clive Betts, chair of the Levelling Up, Housing and Communities committee, said people in affordable homes were facing “outrageous” demands. “There is absolutely no clarity on what people are being charged for,” he said. “These are not affordable homes and there is a lack of proper advice about shared ownership.”

Shared-ownership properties have strictly controlled rent rises, but there are typically no similar limits on service charges. Residents who were required to meet strict eligibility and affordability tests when they bought shared-ownership homes complain they can no longer afford them.

Residents in shared-property homes in Marson apartments, part of the £2.5bn Elephant Park regeneration project near Elephant and Castle, south London, have been told they face service charge increases of nearly 40%.

The charges include paying towards the running costs of public amenities delivered by developer Lendlease, including a park and a tree house, a community space in the park with a cafe, and public roof terrace.

Amada Teruel Sanchez, 36, and partner José Mellado, 47, now face a total annual charge of £5,633. Mellado said: “They never told us we would be paying these charges. It’s a joke.”

Michelle Furber, 52, a primary school teacher and single mother living in Brighton, said her service charge in her affordable home, a shared-ownership property, had increased from £125 a month when she moved in to £417 a month from 1 April, an increase of 234%. She also faces a demand for £2,221 to help cover a deficit in the 2022-23 budget.

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“This is a new-build property so I have no idea why this has increased so much,” she said. “It’s incredibly stressful.”

The Housing Ombudsman Service said it had examined 85 complaints concerning service charges in share-ownership properties in 2023-24 and found maladministration in 79% of cases. One of the highest annual service charges in the country is a shared-ownership one-bedroom flat in King’s Cross, north London, with a demand of nearly £16,000, according to a BBC report.

“There may need to be a fundamental rethink about how shared ownership works,” said Blakeway. “Too often we are finding that we are upholding complaints. This is often because charges are opaque and landlords have not provided transparent or detailed information to residents when challenged.

“There can also be concerns about the quality and level of service provided which can give rise to the feelings of unfairness, especially with the increasing cost of living pressures many residents are under.”

A parliamentary inquiry published by the levelling up, housing and communities committee last week warned shared-property ownership homes were drastically failing to deliver an affordable route to home ownership. Alison Wallace, senior lecturer in social policy and housing at York University, told the inquiry service charges were “opaque” and “often uncontrollable”.

Gove said last year he wanted to abolished the “feudal” leasehold system, but has scaled down his ambitions in the leasehold and freehold reform bill going through parliament. Labour peer Baroness Taylor of Stevenage has described the bill as a “virtually eviscerated shell”.

The bill is intended to improve the management of service charges, with increased transparency. The proposals are also intended to ensure residents are provided with relevant information and supporting evidence for any increases.



An investigation by the Observer has revealed that some of the UK’s largest housing providers have significantly raised annual service charges for residents, causing financial hardship. Many residents of shared-ownership properties, originally built as affordable homes, have received bills with increases of over 40%, leading to concerns about their ability to sell their properties due to the high charges and lack of future increase caps. More than 1,000 affected individuals are considering refusing to pay.

Residents have expressed frustration at the lack of detailed evidence provided to justify the steep rise in service charges. Some shared-ownership homeowners now find their service charges surpassing their rents, prompting concerns about the uncontrollable nature of these increases. Housing Secretary Michael Gove, under pressure to address the issue, has stated that unjustified service charge hikes are unacceptable and that the government’s new bill aims to enhance protections for leaseholders.

The housing ombudsman has raised alarms about the need to rethink shared-ownership schemes, which were designed to facilitate home ownership but are now causing financial strain for residents. Calls for government intervention have been made by advocacy groups like the Social Housing Action Campaign, highlighting the widespread abuse of service charges and the negative impact on residents.

Labour MP Clive Betts has criticized the lack of transparency and proper advice surrounding shared ownership, noting that residents face exorbitant demands without clarity on the services provided. While shared-ownership properties have restrictions on rent increases, service charges often remain unchecked, leading to affordability challenges for many homeowners.

Specific cases, such as residents in Marson apartments facing a 40% service charge increase or a primary school teacher in Brighton experiencing a 234% rise in charges, illustrate the extent of the issue. The Housing Ombudsman Service has identified maladministration in the majority of complaints related to service charges in shared-ownership properties, signaling a systemic problem that needs addressing.

Amid concerns about the quality and cost of services provided to residents, there is a growing consensus that shared ownership arrangements require fundamental reform to ensure affordability and transparency. Efforts to improve the management of service charges and increase transparency through legislation are underway, aiming to provide residents with necessary information and evidence for any future increases.