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Scottish Sun
3 days ago
- Business
- Scottish Sun
The sneaky service charges adding thousands to YOUR bill and how to fight back
One flat owner says he regrets his investment where he now pays £5,300 per year in charges FEE PAIN The sneaky service charges adding thousands to YOUR bill and how to fight back Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) MILLIONS of people living in leasehold properties are being hit with spiralling service charge fees - but there is a way to fight back. Almost five million homeowners pay service fees, which have risen 11% in the last year to an average of £2,300 per month, according to Hamptons. Sign up for Scottish Sun newsletter Sign up 3 Soaring service charge fees and delays to legislation has left leaseholders out of pocket Credit: Getty Some leaseholders have seen charges sky rocket, making it unaffordable and tricky to sell their home. While others have been hit by unfair charges. The government has planned to reform the system - but there are delays. This week JAMES FLANDERS explains how to challenge unfair charges. SOARING FEES Service charges are a fee paid by a leaseholder or resident set by a landlord. The amount varies each year depending on costs to the landlord. They can include charges for maintenance, repairs and insurance. The details are usually set out in your lease. The fee is usually set on what the landlord thinks they will spend. At the end of year the landlord should provide a statement. Detail of world's tallest apartment block revealed - including price of penthouses Some leases allow landlords to ask for contributions towards a "sinking fund" to build up reserves for future larger scale works. David Fell, lead analyst at Hamptons, said: "Both buyers and mortgage lenders have become increasingly cautious about committing to high service charge costs, particularly where they perceive charges to be disproportionate to the amenities they get in return. "As a result, would-be sellers paying high charges have often seen the value of their homes rise more slowly or even fall. "In some cases, sellers are offering potential buyers a cash contribution towards future service charge payments." 3 Service fees have rocketed over the past five years, particularly in the North of England UNFAIR CHARGES Some leaseholders have found that they are being charged unfair fees. Tribunal judges have made some landlords pay back up to £100,000. In one example, they ruled that a £135 fee to change two light bulbs was excessive. In February 2023, it was revealed that landlords and insurance brokers were secretly taking up to 60% of the £1.6billion leaseholders paid for building insurance as hidden commissions. New rules now stop insurance companies from choosing policies just to earn the highest commission, helping leaseholders get better value. But brokers and managing agents are still allowed to take commissions. The government has promised to ban excessive building insurance commissions through the Leasehold and Freehold Reform Act 2024. Instead, landlords will only be able to charge a straightforward and fair "permitted insurance fee" for the work they actually do, making costs clearer and protecting leaseholders from hidden charges. However, these proposed laws still need further legislation to come into effect, and the government hasn't yet provided a timetable for this. New rules planned by the government also plan to introduce commonhold agreements to replace leasehold ones. Commonhold allows flat owners to jointly own and manage their buildings, cutting out landlords and property management companies. But the proposed rules only apply to new homes. A spokesperson for the Ministry of Housing said they know "far too many leaseholders" are being hit with "unreasonable and extortionate charges". A draft of the bill is expected later this year but leaseholders may have to wait months before it becomes law. 3 Leaseholders can challenge costs if they feel they are unreasonable, or if the standard of work is poor Credit: Getty HOW TO CHALLENGE FEES Leaseholders have a legal right within six months of receiving a summary of costs to request extra information from their landlord. You can challenge a cost if you think it's unreasonable, the standard of work is poor or you don't think you should be paying it. For example, you might question a fee for lift maintenance if you live in a ground-floor flat and it's not included in your lease. Or you could challenge charges for communal services, like a gym that's always closed or a concierge service that doesn't have staff. You will need to apply to a tribunal which has the power to rule on whether the service charge is reasonable or payable. In England this is the first-tier tribunal (property chamber). In Wales it's the leasehold valuation tribunal. Applying to the tribunal usually costs a fixed fee of £110, though this may be waived if you're on certain benefits. If your case is transferred from court to the tribunal, you'll only pay the difference between the court fees and the tribunal fee - or nothing if you've already paid more than £110 in court fees. If a hearing is scheduled, you'll need to pay an additional £220 hearing fee. Speak to the Leasehold Advisory Service online at or call them on 020 7832 2500 to find out more and get free advice on service charge issues. You could also apply to the Housing Ombudsman if you have a complaint about how your service charge fees have been managed. It says cases have jumped by 25 per cent in the last four years. If you're finding it hard to pay your service charges, there's support available. If you're on Universal Credit and have been receiving it for at least nine months, you could get help with your service charges if you own a leasehold property. People over the state pension age can also get support through pension credit. £5.3k charge but I waited months for vital repairs LAWYER Liam Spender, 41, thought he'd bought his dream home when he purchased his £591,000 two-bed flat six years ago. But within months it had turned into a nightmare. "I regret buying it to this day," said Liam, who lives in the Isle of Dogs, east London. Initially he paid a £4,200 a year service charge but it has rocketed to £5,300 in just four years - a 26% increase. A huge chunk of his bill - over £1,200 a year - was for buildings insurance, according to Liam. Yet, despite paying so much, Liam had to wait months for repairs after part of his flat's floor collapsed. To make matters worse, he discovered £300 of the insurance fee was being taken as commission by his landlord and their broker. In 2021, Liam teamed up with 103 homeowners in his building block and applied to the property tribunal. A few days before the case their landlord conceded and awarded the homeowners £100,000 in backdated commission payments. It meant that Liam got £300 back, while his neighbours in larger properties received significantly more. "There are millions of people like me in the same boat and they are owed money they don't even know about", said Liam, who has since founded Leaseholder Action to help other people being hit with secret commission fees. RIGHT TO MANAGE If you don't get anywhere by approaching your management company, you could take over managing the charges yourself via Right to Manage. It is a legal process where leasehold residents in flats can take over managing the maintenance and services. To do this, enough long-leaseholders (those with leases originally over 21 years) need to get together and form an RTM company. It costs £50 to set up a company and takes 24 hours to register. You then need to serve notice to the freeholder of the development - the person who owns the land - letting them know you are taking over the right to manage. They then have one month to dispute this. The government is also planning to remove the requirement for leaseholders to cover the landlords expenses during the process, which will save homeowners around £3,000. It's also not allowed if there are four or fewer flats and a landlord lives in the building. It could help you cut out management fee costs and charges for unnecessary work - but you will be responsible for the company and annual reporting. Unless one of you is trained in these areas you may need to take on an accountant or managing agent. Applications to set up RTM companies rose by 20% last year, according to Direct Line.
The Sun
3 days ago
- Business
- The Sun
The sneaky service charges adding thousands to YOUR bill and how to fight back
MILLIONS of people living in leasehold properties are being hit with spiralling service charge fees - but there is a way to fight back. Almost five million homeowners pay service fees, which have risen 11% in the last year to an average of £2,300 per month, according to Hamptons. 3 Some leaseholders have seen charges sky rocket, making it unaffordable and tricky to sell their home. While others have been hit by unfair charges. The government has planned to reform the system - but there are delays. This week JAMES FLANDERS explains how to challenge unfair charges. SOARING FEES Service charges are a fee paid by a leaseholder or resident set by a landlord. The amount varies each year depending on costs to the landlord. They can include charges for maintenance, repairs and insurance. The details are usually set out in your lease. The fee is usually set on what the landlord thinks they will spend. At the end of year the landlord should provide a statement. Detail of world's tallest apartment block revealed - including price of penthouses Some leases allow landlords to ask for contributions towards a "sinking fund" to build up reserves for future larger scale works. David Fell, lead analyst at Hamptons, said: "Both buyers and mortgage lenders have become increasingly cautious about committing to high service charge costs, particularly where they perceive charges to be disproportionate to the amenities they get in return. "As a result, would-be sellers paying high charges have often seen the value of their homes rise more slowly or even fall. "In some cases, sellers are offering potential buyers a cash contribution towards future service charge payments." 3 UNFAIR CHARGES Some leaseholders have found that they are being charged unfair fees. Tribunal judges have made some landlords pay back up to £100,000. In one example, they ruled that a £135 fee to change two light bulbs was excessive. In February 2023, it was revealed that landlords and insurance brokers were secretly taking up to 60% of the £1.6billion leaseholders paid for building insurance as hidden commissions. New rules now stop insurance companies from choosing policies just to earn the highest commission, helping leaseholders get better value. But brokers and managing agents are still allowed to take commissions. The government has promised to ban excessive building insurance commissions through the Leasehold and Freehold Reform Act 2024. Instead, landlords will only be able to charge a straightforward and fair "permitted insurance fee" for the work they actually do, making costs clearer and protecting leaseholders from hidden charges. However, these proposed laws still need further legislation to come into effect, and the government hasn't yet provided a timetable for this. New rules planned by the government also plan to introduce commonhold agreements to replace leasehold ones. Commonhold allows flat owners to jointly own and manage their buildings, cutting out landlords and property management companies. But the proposed rules only apply to new homes. A spokesperson for the Ministry of Housing said they know "far too many leaseholders" are being hit with "unreasonable and extortionate charges". A draft of the bill is expected later this year but leaseholders may have to wait months before it becomes law. 3 HOW TO CHALLENGE FEES Leaseholders have a legal right within six months of receiving a summary of costs to request extra information from their landlord. You can challenge a cost if you think it's unreasonable, the standard of work is poor or you don't think you should be paying it. For example, you might question a fee for lift maintenance if you live in a ground-floor flat and it's not included in your lease. Or you could challenge charges for communal services, like a gym that's always closed or a concierge service that doesn't have staff. You will need to apply to a tribunal which has the power to rule on whether the service charge is reasonable or payable. In England this is the first-tier tribunal (property chamber). In Wales it's the leasehold valuation tribunal. Applying to the tribunal usually costs a fixed fee of £110, though this may be waived if you're on certain benefits. If your case is transferred from court to the tribunal, you'll only pay the difference between the court fees and the tribunal fee - or nothing if you've already paid more than £110 in court fees. If a hearing is scheduled, you'll need to pay an additional £220 hearing fee. Speak to the Leasehold Advisory Service online at or call them on 020 7832 2500 to find out more and get free advice on service charge issues. You could also apply to the Housing Ombudsman if you have a complaint about how your service charge fees have been managed. It says cases have jumped by 25 per cent in the last four years. If you're finding it hard to pay your service charges, there's support available. If you're on Universal Credit and have been receiving it for at least nine months, you could get help with your service charges if you own a leasehold property. People over the state pension age can also get support through pension credit. £5.3k charge but I waited months for vital repairs LAWYER Liam Spender, 41, thought he'd bought his dream home when he purchased his £591,000 two-bed flat six years ago. But within months it had turned into a nightmare. "I regret buying it to this day," said Liam, who lives in the Isle of Dogs, east London. Initially he paid a £4,200 a year service charge but it has rocketed to £5,300 in just four years - a 26% increase. A huge chunk of his bill - over £1,200 a year - was for buildings insurance, according to Liam. Yet, despite paying so much, Liam had to wait months for repairs after part of his flat's floor collapsed. To make matters worse, he discovered £300 of the insurance fee was being taken as commission by his landlord and their broker. In 2021, Liam teamed up with 103 homeowners in his building block and applied to the property tribunal. A few days before the case their landlord conceded and awarded the homeowners £100,000 in backdated commission payments. It meant that Liam got £300 back, while his neighbours in larger properties received significantly more. "There are millions of people like me in the same boat and they are owed money they don't even know about", said Liam, who has since founded Leaseholder Action to help other people being hit with secret commission fees. RIGHT TO MANAGE If you don't get anywhere by approaching your management company, you could take over managing the charges yourself via Right to Manage. It is a legal process where leasehold residents in flats can take over managing the maintenance and services. To do this, enough long-leaseholders (those with leases originally over 21 years) need to get together and form an RTM company. It costs £50 to set up a company and takes 24 hours to register. You then need to serve notice to the freeholder of the development - the person who owns the land - letting them know you are taking over the right to manage. They then have one month to dispute this. The government is also planning to remove the requirement for leaseholders to cover the landlords expenses during the process, which will save homeowners around £3,000. It's also not allowed if there are four or fewer flats and a landlord lives in the building. It could help you cut out management fee costs and charges for unnecessary work - but you will be responsible for the company and annual reporting. Unless one of you is trained in these areas you may need to take on an accountant or managing agent. Applications to set up RTM companies rose by 20% last year, according to Direct Line.
Telegraph
11-05-2025
- Business
- Telegraph
Why Londoners have given up on the Cotswolds
The Cotswolds needs little introduction. With picturesque countryside and honey-coloured villages packed with handsome homes, private members' clubs, celebrities and tourists, it has long been the ultimate place for Londoners to escape to. But new figures show that the London exodus to this desirable corner of England has shrunk. People from the capital accounted for 9pc of people looking to buy a property in the Cotswolds last year, down from a peak of 14pc in 2021, according to analysis by Hamptons. This is because they are being priced out. Average prices in the Cotswolds have risen 56pc since 2014, twice the growth recorded in London (28pc) over the last decade, according to Hamptons' analysis of Land Registry data. 'Londoners haven't had the housing market on their side for the best part of a decade,' says David Fell, of Hamptons. The pandemic turbo-charged momentum in the Cotswolds. 'There was an influx of London buyers during Covid who were flush with cash. Larger family homes skyrocketed in price because stock levels were low,' says Amelia Craven, of RA Bennett. By last year, the average property in the Cotswolds cost 18pc less than one in London, a stark contrast with 2016, when the gap was 34pc. 'While the gap between prices in the capital and pretty much everywhere else peaked around 2016, it's been steadily closing since then,' says Fell. 'Today the gap between prices in the capital and the Cotswolds is around £80,000 smaller than it was at its peak. This means the average Londoner gets less house for more money or faces compromising on a picture-postcard location.' 'You won't see that £30k Airbnb income now' Demand has been dented in part as the life has gone back to pre-pandemic usual. 'There has certainly been a change in working attitudes,' says Paul Houghton-Brown, of Hamptons. 'People need to be back in the office more and they have less time to enjoy a second home. That second home buyer market has dropped away.' And owning a holiday home has become much more expensive, after council tax for second properties in the local authority was doubled – although very wealthy buyers may well shrug off this increase. The proportion of second home buyers eyeing the Cotswolds has edged down from 5pc during the pandemic years of 2021 and 2022, to 4pc in 2023 and 2024. Meanwhile, the staycation boom has eased, taking its toll on lettings, suggests Andrew Cronan, of Recoco Property Search. 'A lot of people purchased Cotswolds property to enjoy as a second home and let out to holidaymakers on platforms, such as Airbnb, but that buyer appetite has cooled off dramatically,' Cronan explains. 'You won't see £20,000 to £30,000 annual income that you were almost guaranteed during the pandemic years. A key reason for this is that a lot of people favour holidaying in sunny locations abroad ever since travel restrictions have been lifted.' For Lindsay Cuthill, of Blue Book Agency, the market had settled into more typical conditions last year following the Covid rush. 'The urgency had faded, and buyers were making more considered decisions rather than panic purchasing,' he says. Tighter economic conditions have also piled pressure on buyers, with factors ranging from higher mortgage costs, to increasing tax. This includes a hike in the stamp duty surcharge for second home purchases from 3pc to 5pc in last year's Budget. 'Elections, high interest rates, shifting tax policies, and changes to non-dom rules have cast a shadow over the market, dampening activity across the UK,' says Jonathan Harington, of Haringtons UK. 'The Cotswolds – where the upper end of the market is traditionally driven by discretionary purchases – felt this slowdown even more acutely.' The rise in big-ticket homes Despite cooling demand from some buyers, the proportion of big-ticket homes changing hands in the Cotswolds has climbed. The percentage of homes sold for £1m or more reached 9.2pc in 2023, the highest figure in Hamptons' research, which stretches back to 2008. The level dipped to 8.7pc last year. Harry Gladwin, of The Buying Solution, says: 'The £3m to £7m part of the market is still pretty busy. The wealthy view these homes as a long-term lifestyle, not just a financial decision. Quality and privacy are more important than ever.' In the £2m to £5m price bracket, 'the real quality, timeless, well-located properties are still sought-after and get premiums. The less special properties, which would have been mopped up in a good market, are left on the shelf', he adds. The Cotswolds has always been popular, reports Giles Lawton, of Strutt & Parker: 'As one US buyer said: 'You find an area as pretty and accessible as the Cotswolds and I'll buy there. But I can't find it.' That popularity has endured and people tend to stay for a while.' Against this backdrop, sales in the Cotswolds have become increasingly local. The average distance moved last year was 20.6 miles – 57pc lower than in 2022. And nearly a third of buyers moved less than 10 miles last year, up from a low of 10pc in 2022, according to Hamptons. Mary Hughes and her husband are selling their four-bedroom home in Broadway, through Chartwell Noble, and downsizing within the village. She says: 'We wouldn't dream of going anywhere else.' 'We have been here for more than 40 years. The attraction was the same then as it is now. We have beautiful, hilly surroundings and honey-coloured stone buildings 'There are many clubs and activities, the Royal Shakespeare Company in nearby Stratford-upon-Avon, and fast trains from Moreton-on-Marsh to London. It's very easy to live here.' Craven has seen more local movement recently: 'During Covid, that was impossible. Stock levels were low and vendors were looking at Londoners or cash buyers who flooded the market, whereas now, the positive growth in house values has meant that those who were already homeowners in the area prior to this period have built equity to allow them to move more freely,' she explains. Harry Gladwin, of The Buying Solution, says: 'The local buyers I tend to deal with are either people renting while looking for the right house to buy, or those downsizing from a bigger house with land to a village house. 'I have a few younger clients who moved from London to the Cotswolds 'golden triangle' pre-Covid and sold during or post-Covid. They saw huge increases in their property values during that time. They have now moved to less busy areas of the Cotswolds where they get more value for money.' It's not just local buyers raising their profile. Claire Whisker, of First In the Door, says one of its buying agents has noticed an uptick in overseas buyers recently, particularly expats returning to the UK and second home buyers from Jamaica, UAE and America. Where to find value for money Buyers seeking better value are looking beyond the Cotswolds' golden epicentre for a similar home at a more affordable price. Gladwin estimates buyers generally get 10pc more value for money in villages to the west of Stow-on-the-Wold, such as Guiting Power, Naunton and those up towards Snowshill, than in the heart of the Cotswolds. Nicholas Le Ny-Clarke, of Chartwell Noble, says: 'Londoners are starting to look further afield to villages in Warwickshire, such as Whichford, Cherington and Brailes, as well as those closer to Banbury in Oxfordshire. 'They are looking for the same house but more value for money and a real community. They want a proper local pub that they don't have to book months in advance. People tend to live here year-round. 'A house suitable for the Chipping Norton set might be a third cheaper half an hour away into the borders of Warwickshire and Oxfordshire.' Buyers tend to get even more value towards Cirencester, Gladwin adds. 'There are some areas where you will see 20pc to 30pc more value compared with the 'golden triangle'. These villages are relatively unspoilt and not in the melee of 'Daylesfordshire'.' This chimes with Samantha Scott-White, of Cotswold Buying Agent, who says: 'The further south you go, the better value you get. The villages around Cirencester are really lovely. If you want more value for money, head further south towards Tetbury, Nailsworth, Wotton-under-Edge and Sherston.'
The Guardian
10-02-2025
- Business
- The Guardian
Average service charge for flat in England and Wales hit £2,300 last year
The average annual service charge for a leasehold flat in England and Wales has jumped by an inflation-busting 11% to £2,300, according to data. The increase – the biggest for at least eight years – means that for many their service charge is their largest household bill after their mortgage, and may fuel fresh calls for the government to accelerate an overhaul of the scandal-hit leasehold sector. Average service charges are now above £2,000 in every region of England for the first time, said the estate agent Hamptons, which compiles an index that calculates the average annual bill for the 5.4 million leaseholders of flats in England and Wales. The service charge paid by flat owners usually includes maintenance and repairs, building insurance and management costs. Amid scandals and controversy over 'unfair' and opaque charges, issues with cladding, damp and mould, and a feeling of powerlessness among many leaseholders, the government has pledged 'sweeping' changes. It has promised leaseholders more powers and protections, though some already-announced measures have been delayed. Hamptons said that after a 4.3% rise in 2023, the typical service charge increased by 11% last year to £2,300 a year, or £192 a month. That is more than four times the 2.5% increase in the consumer price index (CPI) during the same period. Over both the short and medium term, service charges have been rising faster than inflation. Overall, between 2019 and 2024, the average annual service charge rose by 33.9%: from £1,717 to £2,300. However, this disguises wide variations between regions and types of property. Hamptons said a 'north-south divide' had opened up. The average service charge in the north-east and north-west England had risen by 60.9% and 57.6% respectively over the period, compared with 27.7% increase for the four regions of southern England. This divide is linked to the higher number of new city centre developments in the north of England and the Midlands that offer facilities such as a lift, gym and concierge facilities, said a Hamptons spokesperson. In addition to floor area, service charges usually reflect the age of the building and the facilities on offer. 'Larger, amenity-rich developments have generally seen service charges rise much faster than smaller developments with fewer facilities,' said Hamptons. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Last year's average service charge increase was the biggest annual rise since the firm began its index in 2016. Hamptons' analysis showed 51% of leaseholders were paying more in service charges than they were in council tax. David Fell, the lead analyst at the firm, said would-be sellers of leasehold flats who were paying high charges had often seen the value of their homes rise more slowly or even fall. 'In some cases, sellers are offering potential buyers a cash contribution towards future service charge payments,' he added. The Leasehold and Freehold Reform Act 2024, which became law shortly before the general election, introduced some changes to the sector. Labour has committed itself to ending the 'feudal' leasehold system before the end of this parliament.
