By Rona Jones*
Residents in shared ownership flats in the new Circus Street development, Brighton have found themselves trapped in properties that they can no longer afford due to unexplained service charge increases of up to 170%.
The block of flats that I live in are new builds, consisting of a mix of flats that are privately owned, privately rented and shared ownership.
Shared ownership means that we ‘own’ part of the property (often by buying it with a mortgage), and pay rent to a landlord on the remainder. There are many others at Circus Street who are similarly shared owners, and our landlord is Clarion.
Many of us who live here bought our properties through ‘affordable housing’ schemes that should have in theory enabled us to get on the housing ladder. I am a teacher and a single parent. Living in Brighton is increasingly hard, even on a relatively good wage, because of rent increases and having to pay a mortgage.
Purchasing my property through a shared ownership scheme enabled me to be able to afford a home for myself and my son to live in that I probably would otherwise not have been able to afford. In the Circus Street estate, Clarion is the landlord for shared owners and the day to day estate management is provided by Savills.
I moved here in August 2021, but even in this short space of time, myself and fellow residents have been shocked to discover that Clarion and Savills have increased our service charges between 140% to 170%.
For some this meant our service charges have increased from £1,560 to £4,000 per year, equating to monthly increases between £200 and almost £335. For many of us, this is simply unaffordable. These costs had to be absorbed alongside rent and mortgage rate rises.
In addition, in the past month we have received notice that they require us to pay an additional backdated fee of £2,221 because Clarion claims we were undercharged last year.
Like my neighbours, I cannot afford these increases. We bought these properties because they were meant to have been affordable and these huge increases are beyond our means.
Stonewalling
Clarion and Savills have been particularly unhelpful to the residents and have repeatedly stonewalled in response to our questions. They are unwilling to share information to explain the increase in service charges.
We contacted the Social Housing Action Campaign (SHAC) who supported us to withhold payment of service charge increases. The situation now is that we are trapped. A neighbour is currently trying to sell their flat, but has found that mortgage providers will not lend to new owners because the service charge is so high. Many prospective buyers have also failed the affordability test set by Clarion, again due to the significantly high service charge.
Clarion have little incentive to address the problem. They are the superior leaseholders and take a percentage of the service charge levied by Savills. It serves their bottom line to have the charges as high as possible even if those charges are unjustified.
So we are at our wits end and suffering extreme anxiety. It seems unjust that a giant corporation like Clarion can unilaterally, during a cost-of-living crisis, supercharge for services and make our housing unaffordable and unsellable.
What was meant to have been a lifesaver for me as a single parent to get on the housing ladder and build an investment for the future, is turning into a nightmare.
SHAC Campaigns
SHAC is lobbying and campaigning to end service charge abuse, and has produced guidance and tools that people affected can use to challenge unexplained or extortionate costs. We are helping groups of tenants and residents, like those at Circus Street, to organise collectively and hold their landlord to account. SHAC is also campaigning against unfair rents and uncapped service charges.
Join us to get involved.
* Not her real name
28 November 2023
If you have a WordPress account, get notifications about new articles by subscribing below: