Our service charges have increased by £552 a month – it’s crippling

A COUPLE have told how their ‘dream has been shattered’ after their service charges were increased by £552 a MONTH.

Patrick Duffy, 31, and his partner Lewis Ryan, 40, say they would never have met the affordability criteria for their two-bedroom apartment in London if they had known the fee would rise so much.

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The pair told it BBC how they bought their home in 2017 under a shared ownership system from housing association One Housing.

The shared ownership system allows first-time buyers to buy with a lower deposit than a normal purchase.

You are co-owner of your home with a housing association, you buy part of the home and then pay rent on the rest.

Patrick and Lewis have a mortgage on 60% of the home they own.

They then pay rent to the housing association on the remaining 40%.

They also pay monthly service costs.

Service charges are paid by the leaseholder for the services provided to the leaseholder or landlord of the building under the lease agreement.

These costs generally cover repairs or maintenance to the property, including building insurance.

There is no limit on these costs and paying them is usually a condition of the rental agreement.

Patrick and Lewis’ service charges went from an initial £94 per month in 2017 to £515 in April 2023.

Just two weeks ago the couple were told this would rise again to a “crippling” £646 a month.

They have tried to put their apartment up for sale, but because of the service costs they say this is “undesirable”.

Patrick told the BBC: “We can’t sell our flat and we can’t afford to live in it.

“At a time when mortgage rates have risen so dramatically, it’s hit at a time when we’re all quite vulnerable. The whole thing is very intimidating.”

Lewis, who works for the NHS, started working at weekends to keep up with rising costs, but had to stop when it started to take a toll on his health.

The couple now has to use credit cards to pay for their groceries while trying to balance their mortgage, rent and service charges.

A spokesperson for One Housing told The Sun: “We sympathize with Mr Duffy and his partner’s concerns about the service charges at their home and would like to apologize for any inconvenience caused.

“One Housing is the landlord of properties where Mr Duffy and his partner live, but we do not own the building.

“The manager charges us the costs of providing a variety of services including utilities, communal cleaning, security, concierge fees, repairs and maintenance, window cleaning, gardening etc.

“We then pass these costs on to our customers through service costs, in accordance with landlord and tenant law.”

Concerns are growing that the lack of regulation around these costs could leave homeowners with unaffordable bills and make homes difficult to sell.

It comes at a time when the government wants to introduce a bill on leasehold reform.

The Leasehold and Freehold Reform Bill aims to make it cheaper and easier for more leaseholders in England and Wales to extend their lease, buy their property and take over the management of their building.

It would also regulate service charges and property management costs for the estimated five million people who own their properties in Britain as leasehold properties.

MPs approved the bill on third reading, meaning it will now be further debated by the House of Lords

What is a leasehold property?

If you have a leasehold on a property, this means that you have the right to live in it for a certain period of time.

In Great Britain the standard term is 125 years, but this can be shorter or shorter.

Unless you renew it, ownership of the property reverts to the landlord when it expires, known as the freeholder.

Service charges are paid by the leaseholder for the services provided under the lease.

It is different from leasehold, which is a fee that is imposed as a condition of your lease for the land on which your house is located.

What are service costs?

Service costs are owed by the leaseholder to the landlord for the services he must provide under the lease agreement.

This includes maintenance and repairs, insurance and management costs.

The amount usually varies from year to year, depending on the costs incurred by the landlord.

These are usually divided between leaseholders according to the lease terms.

The rental contract states when the service costs are due, but this can be annually, twice a year or quarterly.

Are there service charge limits?

The service costs can be increased or decreased indefinitely, according to the Leasehold Advisory Service.

But the landlord can only recover reasonable costs.

This means that you have the right to apply to the tribunal to challenge any service charges that you consider unreasonable.

The Leasehold Advice Service advises potential buyers to find out what the current costs are, and what they are likely to be in the future.

It says a lawyer will normally ask the seller for this information.

What to do if you think you have been charged incorrectly

Any costs should be stated in your leasehold agreement and you should be aware of any additional costs before purchasing the leasehold property.

For any additional costs, your owner or landlord must inform you well in advance of the costs.

Although the owner is not obliged to find the cheapest contractor or construction work, he is responsible for ensuring that the costs incurred are reasonable.

According to Lawcomm Solicitors, you have the right to request invoices showing costs incurred during a service charge period.

Doing this will help you assess whether you are getting your money’s worth.

Ultimately, if you are not satisfied with the fees charged, you can apply to the First Tier Tribunal to determine their reasonableness.

Do you have a money problem that needs to be solved? Get in touch by emailing money@the-sun.co.uk.

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