In August 2022, SHAC began to survey members to capture the range of problems they experience with service charges, and the impact on their physical, emotional, and financial well-being.
Our aim is to show the extent of service charge abuse by housing associations, and we have now published an initial report based on the first 300 responses. We would like to thank all those who have taken the time to complete our brief, confidential questionnaire.
The survey remains open and a final report will be published later in the year.
Living in an NHG shared ownership property has probably shortened my life. They are just horrible to deal with and NEVER deal with the fact that our apportionments are all wrong.”
Our research shows a wide and troubling range of problems with housing association service charging. It also draws out the devastating impact on tenants’ and residents’ mental, emotional, financial, and physical well-being. In particular, this is almost wholly because as the process of trying to address overcharging is dragged out by landlords, sometimes over a period of years.
- Around 96% of respondents had experienced problems with service charges – a damning indictment of the way that housing associations are managing their service charging.
- The vast majority of respondents considered their service charges to be too high (just over 80%), closely followed by complaints that the charges are unexplained, unclear, or vague (79%). An almost equal number had been charged for services they had not received (78%).
- Around half of all respondents were charged for services that didn’t apply, for example lift maintenance even though their property had no lift. A similar proportion found that their landlord had incorrectly apportioned costs.
- Around two thirds had difficulty getting hold of invoice packs, and more than 20% found it difficult to get them in an accessible format. The latter finding suggests that housing association landlords are regularly in breach of the Equality Act 2010.
The range and extent of service charge problems experienced by housing association tenants and residents
- The greatest impact experienced by victims of service charge abuse is the damage it causes to mental health. More than 80% of tenants and residents suffered mental health problems as a result of their battles with landlords over charges.
- The abuse can however impact on every area of life, with the stress and distraction causing relationship problems (15%), financial problems (25%), and an intensification of physical ill-health (20%).
- Housing associations were roundly condemned as ‘terrible’ at making the process for challenging inaccuracies easy and effective (80% of respondents).
- Around one third of respondents pay more than £2,500 per annum in service charges; the largest cohort of respondents. The £1,500 to £2,000 per annum category was also quite high at 20%.
- Around one quarter of respondents had increases between 1% and 10%, although a further fifth had paid 20% more in 2022 than in the previous year. Shockingly, just under 5% of respondents found their service charges doubling in a single year.
Housing Association Service Charge Issues and Impact Report
In Our Own Words
These findings are painfully underscored in the words of tenants and residents through the open section of the survey.
Respondents told us that there was a disproportionate impact on disabled tenants and residents, as captured by one respondent who said: “I have a disability Autism this sudden unexpected change has caused me significant alarm and distress I cannot sign my new tenancy until this dispute is settled as the correct fees need to go on the new tenancy agreement”
The utter frustration and stress caused by the constant battle just to get accurate service charges – which should be no battle at all – was the subject of many comments. This included a belief that the difficulties created are deliberate rather than resulting from oversight or incompetence.
Service charge problems can have a profound impact on housing association tenants and residents
For example, one tenant said “Exasperating. It feels the intention is to wear tenants down. Also frustration with lengthy delay in responses, and lack of information and where to go about finding information and who to ask…”. Another adds “Huge stress. It’s a full-time job, of course on top of other job that I need in order to actually pay for cost of living crisis!”
The injustice of the way that service charge abuse is tolerated by the landlord establishment was highlighted “It is a matter of principle. It is criminal to charge for services that are not being delivered.”.
Others echoed many SHAC shared owners and leaseholders unable to sell their properties when charges are high. This causes real and tangible disruption to people’s lives. One resident said “We are stuck and not able to sale, the flat is in good condition but the service charge is too high, residents on the private dwellings have a cheaper service charge and also have access to extra service, so buyers run away.”
The physical, mental, and relationship toll is not just a set of statistics. It is a tale of misery and devastation for the victims, even leading to relationship breakdown. One resident reported “My ex and I broke up over it as it caused constant arguments.”
Tenants and residents overwhelmingly condemned landlords for making the process of challenging service charge inaccuracies difficult and ineffective
The amount of unpaid time that people have to waste challenging landlords for information or remedy is a further injustice on top of the financial abuse. The secretary of a Tenants and Residents Association lamented “it takes many hundreds of hours – all unpaid – that would be unnecessary if Hyde got things right, did not deny anything was wrong and engaged to resolve things. Another said “I have spent years fighting the service charge accounts and have had some success but it is hard work and very frustrating”
These comments are typical and widely felt.
Unregulated and Uncontrolled Service Charging
Our survey exposes the devastating impact that can be caused when landlords consistently overcharge for services, and then make it extremely difficult for tenants and residents to have inaccuracies rectified.
It is our view that government should legislate and actively regulate service charging much more robustly. New laws are needed to ensure that landlords will:
- Externally audit service charge systems using an accredited organisation.
- Externally audit service contract management and procurement processes, and where a sub-contractor repeatedly submits inaccurate invoices, the contract is terminated.
- Improve access to service charge invoice packs, making it a requirement that these are provided in alternative formats if requested.
- Hire sufficient numbers of permanent staff in their service charge teams, with team size proportionate to the number of service-chargeable properties they manage. There must also be a team of dedicated staff for resolving inaccuracies.
- Provide tenants and residents who identify inaccuracies with the facility to speak directly with service charge resolution staff. They should be given a named contact who is leading on resolving their complaint, with a personalised phone and email address for contacting them.
- Provide tenants and residents with an automatic, legal right to compensation if it is found that there are unacceptable and unreasonable errors in service charges.
- Publish tenant and resident rates of satisfaction with service charges.
- Impose substantial, meaningful fines on landlords who fail to meet targets, with compensation to those affected.
- Provide much better access to justice so that victims can find Legal Aid lawyers to take on their cases, and are not left to wait months or years for redress.
- It is clear even from our initial findings that government cannot leave service charging in its current state. Namely, being an almost completely unregulated area of landlord operation despite the fact that housing associations collect millions of pounds of revenue through this process.
- The cost is not just to individual households, but to the taxpayer in unjustified payments through the welfare benefits system.
With a growing number of tenants and residents choosing to withhold service charge payments where they consider them unreasonable or inaccurate, it is also clear that if government does not act to address the scandal of service charge abuse, tenants and residents will take matters into their own hands.
|Tenants and residents concerned about service charges, whether paying directly or through benefits, should visit SHAC X FindOthers End Service Charge Abuse Campaign|
Housing associations provide homes and support for almost six million people around England. Not all are in social rented or affordable rented homes. Other tenures include shared ownership, homes to rent and buy at market rates, sometimes as leaseholders, and some supported and specialist housing.
Housing associations are landlords to around 2.4 million households on social and affordable rent tenancies, and approximately 300,000 households on other tenancy types..
A proportion of housing association tenants and residents pay service charges as an additional payment, otherwise service costs are incorporated into rents.
In total, housing associations receive approximately £1.5 billion in service charge payments annually (where these are separated from rents). Some of this is paid directly by tenants and residents, while Universal Credit (Housing Benefit element) cover payments for the remainder.
There is no government cap on the amount that can be levied through service charges, or the level of annual rises. The legislation only requires charges to be ‘reasonably incurred, and incurred on services or works of a reasonable standard’.
As the report demonstrates, the process of scrutiny and challenge is fraught and arduous, and it takes a huge time commitment to overcome the constant resistance of landlords. There is no capacity within the welfare benefits system to undertake this process in relation to all the service charge payments processed.
Some tenants and residents scrutinise their service charge statements, and where inaccuracies are identified, challenge their landlord to make corrections.
As far as we are aware, there is no equivalent system of scrutiny where these payments are made through the welfare system.
 National Housing Federation – accessed 30 June 2022
 Regulator of Social Housing – 14 December 2021
 Regulator of Social Housing – 14 December 2021
 Landlord and Tenant Act 1985
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