UK residents who are trapped in so called ‘affordable’ housing are preparing legal action against the government after having to pay service charges of up to £8,000 a year. Some who bought shared ownership properties found that their charges had gone through the roof after they had bought their homes and they could not afford to keep them.
The Social Housing Action Campaign (SHAC) is submitting evidence to the National Audit Office, alleging overcharging and lack of transparency. If the NAO refuses to investigate, SHAC plans to push for a judicial review. The critics argue that a significant portion of these costs are indirectly covered by taxpayers through housing benefits.
The residents at the Pickle Factory in London claim they are being made to enter through a ‘poor door’ yet they are still paying towards the service costs of the entire development. In another case, housing associations were telling residents that they could face eviction if they didn’t pay the rising fees. Some were being asked to pay exorbitant amounts of money e.g. £87 per light bulb replacement.
Wayne Baxter who lives in a shared ownership flat saw his service charges rise from £337 to £617 per month in just 2 years. He says he was not informed of such increases and needs the money badly. Some residents who are now unable to sell their houses due to the high fees have stopped paying, and they want to be told the truth.
In some cases, recent legal challenges have resulted in refunds, but campaigners say that more robust regulations are required. The Leasehold and Reform Act 2024 intends to improve transparency; however, residents remain skeptical. With the situation getting worse, the demands for government action to control exorbitant service charges are growing.
