A Clarion tenant has become the first to secure restoration of her previous year’s service charge through strike action. She will no longer need to pay the increase applied by her landlord on the 1st April 2023.
Earlier this year, Clarion notified Anna that from 1st April, her payments would rise from £16.39 to £107.96 per week, partly because of an historical accounting error by her landlord, and partly reflecting the cost-of-living increase for 2023-24.
Clarion: The UK’s largest housing association
Anna*, who lives on a Clarion estate in Tottenham, responded by alerting her landlord that she intended to continue paying her service charge at her 2022-23 rate of £16.39 per week.
The hefty increase was unaffordable and Anna said that she would be pushed rapidly into poverty if she tried to meet this new service charge. In all likelihood, she would just end up with large arrears as her salary has not kept pace with the cost-of-living.
I have been forced to take this action because I have already been affected by a 40-year high inflation. Housing associations have healthy surpluses. I do not. Increasing my service charge is unjustified and would make it impossible for me to manage.”
Anna, Clarion tenant
Clarion subsequently warned Anna that they could take legal action against her if she didn’t pay according to their latest demands, but Anna continued insisting that she would withhold payment of the increase.
When her latest service charge bill arrived, it confirmed that her service charge had been returned to £16.39 as Anna had wanted.
This development marks the first victory for SHAC members involved in this year’s rent and service charge strike action. It mirrors the victory scored last year by Angela*, a tenant of One Housing Group, whose landlord attempted to increase her service charge by 60%.
One Housing Group Tenant’s Non-Payment Forces Service Charge Freeze
Angela had demanded that OHG comply with“all the requests for works, receipts, and invoices for all the work undertaken in relation to my property, which in your view supports the proposed 60%+ service charge increase”. The landlord was unable to comply and after 9 months of withholding payment, One Housing just dropped the demand.
Freezing Rents & Service Charges
Anna’s actions were taken with the support of SHAC as part of the Freeze Rents & Service Charge Rises campaign. The campaign opposes social rent rises of around 7% or higher which were applied in April 2023.
The campaign also supports members who resist service charge increases.
The amount that housing associations can raise rents is decided by government every November when it announces the formula to be used. However, in recognition of exceptionally high inflation, the formula was ditched by government this year in favour of 7% for most types of social rent.
Service charges however are not subject to any cap and are largely unregulated. Housing associations have used this lack of regulation to push charges up to extortionate levels in some cases.
Rapidly rising costs of energy and other household necessities means that people are already managing tightly squeezed budgets, and many cannot absorb further demands on household incomes.
The housing association sector has a collective operating surplus of around £4.4 billion and campaigners believe this should be used to subsidise rents and service charges for struggling households. This was after all what many housing associations were originally set up to do.
Apart from inflationary costs, the service charge system is riddled with often deliberate and fraudulent overcharging, and is the focus of a separate campaign to clean it up.
Interest in the sector’s social purpose element has in recent times taken a back seat for housing associations. Their governing boards and executives, alongside government housing policy and grant-making, have all favoured hyper-commercialisation.
* Not her real name.
15 April 2023
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