RESIDENTS of G15 housing association are going ‘on strike’ and refusing to pay service charge bill increases in response to their monthly payments having risen – by up to 500 per cent!
In fact social housing tenants and shared owners have experienced such increases via their monthly service charge payments. Inside Housing meanwhile has spoken to social housing tenants, shared owners and leaseholders who have gone on a service charge strike – after submitting complaints to the Hyde Group that have remained unresolved for months or years.
Inside Housing has also spoken to five separate residents who live in homes – across four developments owned by the 60,000-home landlord – who have now committed to the strike. It is understood that residents of up to 20 other associations may have also resorted to strike action.
James Baker, a social housing tenant at Vaughan Way in Peterborough, saw his monthly service charge increase from £9 per week to £63 per week at the start of this financial year. Following a complaint, this charge was eventually reduced to £50 per week.
However, this is still more than 500% higher than what he was being charged previously. He described the period since he first received the letter informing him of the service charge increase as ‘nine months of hell’.
Hyde Group has said it is aware that there has been a rise in service charges this year and is directly engaging with residents on the matter. In other cases, one resident in London saw their monthly service charge quadruple, from £30 to £128 per month, while another estate’s collective yearly payments for fire safety alone increased five-fold, to £27,000.
All of the residents Inside Housing has spoken to have made multiple attempts to discuss their service charge with Hyde Group, but said they have had to wait months for a response to their complaints and have described the responses as vague and failing to address the specific issue.
Suzanne Muna, secretary of the Social Housing Action Campaign (SHAC), which is assisting the striking residents, said she is aware of residents of at least 20 social landlords going on service charge strike. She described Hyde Group as a ‘bad apple in an entirely rotten barrel’.
Data collected by SHAC found that the most common reason for residents going on strike was the service charge being too high, followed by the landlord not providing enough information about the service charge. Residents pay service charges too in addition to their rent – to cover communal repairs, cleaning and maintenance etc.
The amount charged to residents can go up and down without limit, but the law dictates these charges must be ‘reasonable’. Tenants also have the legal right to request to inspect receipts and accounts associated with their service charge. Carley Probert, whose service charge in her shared ownership property in Kent increased from £120 to £333 per month two years ago, said she requested invoices from Hyde in October 2020.
She eventually received an invoice pack from Hyde Group, but said it was incomplete and included generic statements, such as how much Hyde pays for cleaning in the entire county, without an explanation of how this related to her individual flat. Probert is trying to sell her flat and has lost out on two buyers while the service charge dispute remains unresolved.
Residents are often given an estimate of their monthly service charge at the beginning of the financial year, but this can be revised if their landlord overspends. Claire Beattie for example, a shared owner living in Lewisham, has seen her monthly service charge increase from around £30 per month in 2018 to £128 per month this year.
She said Hyde has consistently underestimated her service charge, leaving her with a bill for hundreds of pounds at the end of each financial year. Then, this March, she received a letter stating she was £376 in debt due to this undercharging.
In fact data published annually by the Regulator of Social Housing shows that social landlords’ service charge income from social housing lettings increased by £33m (2.3%) to £1.5bn last year, while service charge costs rose by £122m (7%) to £1.8bn. This has happened against a backdrop of the total number of social homes decreasing, meaning social housing tenants are on average experiencing higher service charges per property.
Some residents have been told fire safety is partly responsible for the increase in cost for housing associations. Kent-based social housing resident Fiona Martin said her estate used to collectively pay £4,000 per year for fire safety: but this increased to £27,500 in 2018.
Scott Lawrence, Hyde’s head of property charges, claimed: ‘Increases in service charges are in direct relation to increasing costs to provide services.’
- Vaughan Way,
Peterborough
James Baker’s service charge increased from £9 per week to £63 per week in March last year, despite his saying he doesn’t receive services such as window cleaning and guttering.
When he phoned Hyde to query this, he was told the increase was a mistake and that he should continue paying the original amount. However, in June he received what he described as a ‘nasty letter’ that said he was in arrears.
Almost four months later, his service charge was reduced to £50 per week. Seven months after Baker first complained to Hyde, he was offered £50 in exchange for closing the complaint. Baker refused this and told Hyde to escalate the complaint to the next level, but has not heard anything back since.
‘Honestly, it’s been like hitting my head against a brick wall,’ he said. ‘Sending stuff in, ringing them and explaining … I’ve been told because I’m not paying the service charge, although I’m still paying my rent and everything, I am, according to Hyde, over a grand and a half in arrears.’
- Crescent Estate, Sidcup
Fiona Martin is a social housing resident who has lived on the estate since 1987. In 2018, two years after the properties were transferred from a small housing association to Hyde, the service charge increased from £49 per month to £111.
The service charge was eventually revised and Martin is currently being charged £69 per month. Increased fire safety costs is a big driver of the increase. Previously the entire estate paid roughly £4,000 annually for fire safety costs, but this increased to £27,500 in 2018. This is to pay for things such as fire risk assessments and emergency lighting, rather than any significant remediation work.
Martin is refusing to pay that additional service charge cost until she is invoiced correctly. ‘It really cuts,’ she said. ‘That kind of increase is huge, it’s massive. I work for the NHS and we were on a pay freeze for quite some time.
‘I raised it as a complaint and it just went on and on and on,’ she said. ‘I escalated it to a formal complaint. It takes them so long to deal with stuff that you still haven’t got an outcome to that complaint before the next year’s service charge bill comes in and exactly the same problems are on that.
‘So it’s just escalated. I now have four years of unresolved service charge complaints pending.’
- Billinghurst Court, Lewisham
Claire Beattie is a shared owner whose service charge has increased gradually from £30 per month in 2018 to £128 per month this year. She said Hyde has consistently underestimated how much it will spend, leaving residents with bills for hundreds of pounds at the end of the financial year.
In 2020/21, Beattie was charged an additional £376 on top of what was estimated. Beattie is refusing to pay the deficit, a decision that was first made ‘through circumstance’ as she was not working during lockdown, making it difficult to afford the increase.
‘I just thought to myself a) I can’t pay it’ she said. ‘They’re not clear with communication and when you email them, there’s not a service charge team and then they say: ‘‘We can’t put you through, there’d be too many calls, we can’t possibly put you through.” That clearly tells you you’ve got a problem then, doesn’t it?’ she added.
Meanwhile, the government must learn from past failed green homes programmes and regain the trust of the industry if it is to meet its climate change targets, a cross-party group of MPs has said. The Public Accounts Committee, in particular, has heavily criticised the government over its ‘failed’ Green Homes Grant scheme.
And in a just-published report, the Public Accounts Committee criticised the government’s Green Homes Grant programme and urged ministers to outline the lessons it has learned from the troubled scheme.
Launched in July last year, the Green Home Grant scheme was originally intended to boost the UK’s recovery from the coronavirus pandemic by providing funding to retrofit homes, which in turn would create new jobs.
Of the £2bn allocated to the programme, £1.5bn was to be given to homeowners as vouchers, with the rest going to local authorities to carry out energy-efficiency upgrades at the homes of low-income households.
In March this year, the homeowner side of the scheme was scrapped following reports that the programme had been marred by bureaucracy and delays.
In February it had been revealed that less than 5% of the budget had been allocated, just one month before the scheme’s original deadline.
In the report, the Public Accounts Committee said the Department for Business, Energy and Industrial Strategy’s (BEIS) ‘failure to deliver a viable scheme has damaged confidence in its efforts to improve energy efficiency in private domestic homes’.
