Shared Ownership - HUGE service charge increase by A2D (any help/advice)

Scooter_1978

A2 Dominion have just sent through the costing booklet for 2024/2025 and they're making us pay an extra £300 A MONTH!

I have shared ownership and they're raising my rent/service charge from £604 to £900 (this is excluding bills and mortgage) - that's an increase of 49% - surely they have a responsibility to deliver affordable housing?

When I first moved into this property in 2019 my monthly rent/service charge was £469, they're now saying it's £900 and it's only 5 years later.

Can anyone anyone offer any help/advice on how to fight this? I genuinely can't afford £300 extra a month.

I was planning on speaking to my fellow neighbours over the next few days as I'm sure they'll all feel the same so we can fight this together.  Our shared ownership part of the building is only 12 flats (4 flats each floor -  3 floors) - the larger part of the building (full price) is 9 floors (about 6-7 flats per floor) - it's a building shaped like an 'L' and shared ownership is the bottom part of the L.

Some example questions I'm keen to ask them from looking at these costs (as far as I'm aware we don't have access to the concierge (that's for the full price residents), although I think he walks around the building once an evening to do a safety check.

Mobile Warden - what is this and why has it gone up £27k?

What is 'On Site Staff'? and why have we gone from £0 to £104k

Why have we gone from £0 to £28k for communal gas?

Why has building insurance doubled from £4,800 to £8,532 (bearing in mind only 5 years ago this cost was £1,313)

Any help or advice you could offer would be so appreciated, it's so upsetting.

user1977

Have you checked what your lease says you're actually meant to be paying for? Just because you think you don't benefit from a particular service charge item doesn't necessarily mean you're not liable to pay a share.

TeaBee72

Hey scooter. I had a similar albeit not as extreme scenario as you recently. This is by no means advice but thought I’d share what we did.

We pay circa £50 a month in service charges for a small block of 4 flats ( 1 of which is ours ). Like you, every year we get our breakdown of Costs and service charge for the following year. This steadily went up each year with inflation. 

After getting annoyed that around half of these costs were for cleaning each ( so £100 a month ), we got confused to know that a cleaner visits once every quarter and wipes over the window sills and signed a time sheet! So we were paying between us £300 for someone to come for ten minutes to do that. I thought I was in the wrong job 😂

So I raise my concerns and requested ( formally in writing ) a full breakdown of all invoices, time sheets, Costs to the housing provider etc and warned that if this was not complied with, it would reinforce my suspicion that I was being taken for a ride and would stop my direct debits pending legal action ( there was no way I was going to fork out for that! But they didn’t know ). I quoted various obligations that they have as a housing provider too.

one month later. An apology letter, and 3 years refund for service charges in our bank account. Done.

It was nice to get our money back, but it did worry me somewhat on what these big housing associations complicity ignore just because they can. One little token gesture to annoying people like me, but how many aren’t? 

Not the ‘answer’ to your question, but a potential way of looking at the issue. 

Scooter_1978

Thank you both - I've got all my moving in docs (lease etc) in front of me and plan to study them in detail now.  I don't mind the cleaning costs (I actually think they do an o.k job on that front, after they changed contractors due to complaints).....it's these new/extra costs that make it £300 a month EXTRA - building insurance should not be going from £4,800 to £8,532, why have we suddenly got a new £28k cost for communal gas, what is on site staff at £104k (never had one before).  I should say, they're also putting the rent side up my 9.4%, it's horrible.

user1977

Scooter_1978 said:

building insurance should not be going from £4,800 to £8,532, why have we suddenly got a new £28k cost for communal gas, what is on site staff at £104k (never had one before).  I should say, they're also putting the rent side up my 9.4%, it's horrible.

Buildings insurance may well be what it costs, insurance generally has shot up in the last year or so.

Are you unaware of any sort of communal heating system? Or have they just not charged you for it previously?

We don't know who the on site staff are.

Rent is a separate matter.

eddddy

Scooter_1978 said:

I have shared ownership and they're raising my rent/service charge from £604 to £900 (this is excluding bills and mortgage) - that's an increase of 49% - surely they have a responsibility to deliver affordable housing?

Scooter_1978 said:

I should say, they're also putting the rent side up my 9.4%, it's horrible.

How much of the £604 and £900 is rent? 

I suspect your lease says your rent increases annually with RPI. If so, on what date is the RPI measured? It looks like it was around 9.4% in January.

You say you bought the property in 2019.

• You might be lucky and RPI might have increased slower than market rents in your area since 2019 - so you're getting a good deal

• Or you might be unlucky and RPI might have increased faster than market rents in your area since 2019 - so you're getting a bad deal

That's a risk you have to take with shared ownership.


But it looks like you might have had a very hefty increase in service charges as well. You can investigate those, and potentially challenge them.

eddddy

TeaBee72 said:

After getting annoyed that around half of these costs were for cleaning each ( so £100 a month ), we got confused to know that a cleaner visits once every quarter and wipes over the window sills and signed a time sheet! So we were paying between us £300 for someone to come for ten minutes to do that. I thought I was in the wrong job 😂

So I raise my concerns and requested ( formally in writing ) a full breakdown of all invoices, time sheets, Costs to the housing provider etc and warned that if this was not complied with, it would reinforce my suspicion that I was being taken for a ride and would stop my direct debits pending legal action ( there was no way I was going to fork out for that! But they didn’t know ). I quoted various obligations that they have as a housing provider too.

one month later. An apology letter, and 3 years refund for service charges in our bank account. Done.

That's interesting. Do you mean you had all your service charges for 3 years refunded (if so why?), or just the service charge relating to the cleaning which wasn't being done?

Did you get an explanation of the error?

FWIW, stopping your direct debit would have been a very risky thing to do - that's not good advice for others reading this thread.

The safe approach is to continue to pay under protest, and take the freeholder to tribunal.

It costs £100 to apply to tribunal, and it's supposed to be designed for leaseholders to do themselves, without the need for legal advice (especially for a straightforward case like yours).

If you win, the freeholder generally has to pay you the £100 tribunal fee as well.

DullGreyGuy

Scooter_1978 said:

Thank you both - I've got all my moving in docs (lease etc) in front of me and plan to study them in detail now.  I don't mind the cleaning costs (I actually think they do an o.k job on that front, after they changed contractors due to complaints).....it's these new/extra costs that make it £300 a month EXTRA - building insurance should not be going from £4,800 to £8,532, why have we suddenly got a new £28k cost for communal gas, what is on site staff at £104k (never had one before).  I should say, they're also putting the rent side up my 9.4%, it's horrible.

If you don't recognise line items then ask them what they are... presumably your building doesn't have cladding or anything else that suggests a fire marshal or such needs to be present?

How does heating work in your unit and the building in general? 

Scooter_1978

Thank you everyone, your words/advice are really helpful.

We have a central heating system (for the underfloor heatings/hot water) - that cost is called 'central energy plants' and hasn't risen in the new proposed costing (£30k).

We were built after the cladding issue so there's not a problem/costs on that side.

On the RPI rent side, it says the below

Each year, shared ownership rents usually rise in line with the Retail Price Index which is published in September. Some leases allow for an increase of Retail Price Index only (8.9%) and others allow an additional 0.5% to be added (9.4%).

In 2020/2021 the rent was £310 and service charge was £137 (£477 a month in total with sinking charge). 

4 years later for 2024/2025 they're now saying the rent is £389 and the service charge is £480.79 (£900.51 a month total with sinking charge).  It blows my mind, they can't be allowed to get away with this.  

My breakdown of the 2024/2025 costs and £900.51 a month is
£389.37 for rent (up £33.46 from current cost of £355.91)
£480.79 for service charge (up £260.76 from current cost of £220.03)
Sinking fund is up from £28.44 to £30.55

DullGreyGuy

So rent has moved inline with RPI so is to be expected. 

Have you asked them yet what the additional service charge items are?

eddddy

Scooter_1978 said:

£480.79 for service charge (up £260.76 from current cost of £220.03)

£5.7k for the year is a very hefty service charge.

Scooter_1978 said:

Mobile Warden - what is this and why has it gone up £27k?

What is 'On Site Staff'? and why have we gone from £0 to £104k

Why have we gone from £0 to £28k for communal gas?

Why has building insurance doubled from £4,800 to £8,532 (bearing in mind only 5 years ago this cost was £1,313)

A 'warden' and 'on site staff' does make it sound like there's a fire safety issue. (And that might also explain the increased buildings insurance.) But you should have been told about this.


As a starting point, you should ask the housing association for more info on the costs. They might give you some general information if you phone their contact centre. You can then decide if you want more detailed info.

They seem to have contact details here: https://a2dominion.co.uk/en/contact-us